On a salary of ₹10 lakh in FY 2026-27 (AY 2027-28), your income tax under the New regime is ₹0 - the Section 87A rebate wipes it out. The Old regime can't beat zero (you'd pay ₹1,06,600 under it with only the standard deduction), so the New regime is the clear choice.
₹10 lakh salary - tax at a glance
| Particulars | Amount |
|---|---|
| Gross salary | ₹10,00,000 |
| Tax - New regime (incl. cess) | ₹0 |
| Tax - Old regime, standard deduction only | ₹1,06,600 |
| Recommended regime | New (saves ₹1,06,600) |
| Break-even deduction | - (New is ₹0, unbeatable) |
| Monthly in-hand (New regime) | ₹83,333 |
How the tax is calculated (New regime)
Taxable income after the ₹75,000 standard deduction = ₹9,25,000. It falls into these slabs:
| Slab · rate | Tax |
|---|---|
| Up to ₹4,00,000 · 0% | ₹0 |
| ₹4,00,000 – ₹8,00,000 · 5% | ₹20,000 |
| ₹8,00,000 – ₹9,25,000 · 10% | ₹12,500 |
| Tax on slabs | ₹32,500 |
| Rebate u/s 87A | − ₹32,500 |
| Health & Education cess (4%) | ₹0 |
| Total tax (New regime) | ₹0 |
Should you pick the Old or New regime at ₹10 lakh?
Because taxable income after the ₹75,000 standard deduction stays within the ₹12 lakh rebate limit, the new regime brings tax to zero. See how the ₹12 lakh zero-tax band works.
What a ₹10 lakh salary looks like month to month
₹10 lakh a year is roughly ₹83,333 a month before PF and professional tax - a typical package for a software engineer with 3-5 years' experience, a mid-level bank officer, or a senior teacher in a private school. It is also the first salary band where a lot of people start getting bad tax advice, because under the rules that applied until FY 2024-25 you would have paid about ₹44,200 in tax on this income. Under the slabs in force for FY 2025-26 and FY 2026-27, you pay nothing.
That single fact changes what you should do with your money. Every "tax-saving" product pitched to you - ELSS funds, 5-year tax-saver FDs, traditional insurance plans - is sold on the promise of reducing tax you no longer owe. At ₹10 lakh under the new regime, an ELSS fund is just an equity fund with a 3-year lock-in, and a tax-saver FD is just an FD you cannot break. Buy them only if you would want them anyway.
How much other income you can add before tax kicks in
Your taxable salary is ₹9,25,000 after the ₹75,000 standard deduction, and the Section 87A rebate covers taxable income up to ₹12,00,000. That leaves ₹2,75,000 of headroom for other income - FD interest, savings interest, dividends, rent - before you owe a rupee.
| Salary ₹10 lakh plus… | Taxable income | Tax (New regime) |
|---|---|---|
| Nothing else | ₹9,25,000 | ₹0 |
| ₹2,75,000 FD interest | ₹12,00,000 | ₹0 |
| ₹3,00,000 FD interest | ₹12,25,000 | ₹26,000 |
Notice the jump: ₹25,000 of extra interest costs ₹26,000 in tax. That is the marginal-relief zone just past ₹12 lakh, where each extra rupee is effectively taxed at 100% until slab tax catches up (around ₹12.71 lakh taxable). If you are close to the limit, a Sukanya Samriddhi or PPF account - whose interest is exempt and never enters taxable income - is a cleaner home for savings than an FD.
Capital gains are the exception. Equity LTCG and STCG count towards the ₹12 lakh limit but the rebate never wipes out the tax on them, so a ₹2 lakh short-term gain on stocks is taxed at 20% (₹41,600 with cess) even though your salary alone is tax-free.
Could the Old regime ever win at ₹10 lakh?
Only by matching zero, never by beating it. In the old regime your taxable income is ₹9,50,000 after the ₹50,000 standard deduction, and the old 87A rebate only applies up to ₹5,00,000. You would need ₹4,50,000 of deductions on top - for example a ₹1.5 lakh 80C, a ₹2 lakh home-loan interest claim, ₹25,000 of 80D and ₹50,000 of NPS - just to tie. With a "normal" ₹1.5 lakh 80C you would still owe ₹75,400. There is no scenario where the old regime is the better choice at this income, so do not let your employer's payroll default (or an old habit) put you in it.
What you should do: tell HR in April that you are on the new regime (it is the default, but confirm it), so no TDS is deducted through the year. If TDS was deducted anyway, the full amount comes back as a refund when you file your ITR - usually within a few weeks of e-verification.
Your real tax depends on your 80C, HRA, NPS and home-loan interest. Add them and compare both regimes in seconds.
Calculate your exact tax →Frequently asked questions
How much income tax on a ₹10 lakh salary in FY 2026-27?
Under the new regime you pay ₹0 on a ₹10 lakh salary (after the ₹75,000 standard deduction). Under the old regime with only the standard deduction it is ₹1,06,600.
Which tax regime is better for a ₹10 lakh salary?
The new regime - it gives zero tax at this income, which the old regime cannot beat.
What is the monthly in-hand for a ₹10 lakh salary?
About ₹83,333 per month under the new regime, before any employer PF or other deductions.
Should I still invest in ELSS or PPF on a ₹10 lakh salary?
Only for the investment itself, not for tax. Under the new regime your tax is already ₹0, so 80C investments cannot reduce it further. PPF is still a good tax-free debt option; ELSS is simply an equity fund with a 3-year lock-in.
Why is TDS being deducted from my ₹10 lakh salary if the tax is zero?
Most likely your employer has you on the old regime, or has not updated its payroll for the FY 2025-26 slabs. Submit a declaration choosing the new regime. Any excess TDS is refunded when you file your return.
I got a raise to ₹13 lakh - how much more tax will I pay?
At ₹13 lakh salary the taxable income is ₹12,25,000, just past the rebate limit. Marginal relief caps the tax at ₹26,000 (₹25,000 plus cess) instead of the full slab tax of about ₹66,300.