Zero. Tax on ₹10 lakh income is nil under the new tax regime for FY 2026-27. Slab tax on ₹10 lakh is only ₹40,000, and the Section 87A rebate — up to ₹60,000 for resident individuals with taxable income up to ₹12 lakh — wipes it out entirely. Salaried or self-employed, at ₹10 lakh you pay no income tax in the new regime, with no deductions to claim and no paperwork to maintain.
Try it yourself: use our new tax regime calculator to check your exact liability for any income.
In this guide
- Slab-wise tax calculation for ₹10 lakh (FY 2026-27)
- Salaried vs non-salaried: why both pay zero
- Take-home salary and monthly TDS
- How the 87A rebate works (and its limits)
- Old regime vs new regime at ₹10 lakh
- Do you need to do anything to save tax at this income?
- Common mistakes to avoid
- FAQs
Slab-wise calculation: ₹10,00,000 (FY 2026-27)
New regime slabs for FY 2026-27 (unchanged by Budget 2026):
| Income slab | Rate | Tax |
|---|---|---|
| Up to ₹4,00,000 | Nil | ₹0 |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 – ₹10,00,000 | 10% | ₹20,000 |
| Total slab tax | ₹40,000 | |
| Less: Section 87A rebate | –₹40,000 | |
| Tax payable | ₹0 |
With zero tax, there is no 4% health & education cess and no surcharge.
Salaried vs non-salaried at ₹10 lakh
Salaried employee:
- Gross salary: ₹10,00,000
- Less standard deduction: –₹75,000
- Taxable income: ₹9,25,000
- Slab tax: ₹20,000 + ₹12,500 = ₹32,500 → fully rebated → ₹0
Self-employed / freelancer (no standard deduction):
- Taxable income: ₹10,00,000
- Slab tax: ₹40,000 → fully rebated → ₹0
Either way, the 87A rebate covers the entire liability because taxable income stays well under the ₹12 lakh rebate threshold.
Take-home salary and monthly TDS
| Annual | Monthly | |
|---|---|---|
| Gross income | ₹10,00,000 | ₹83,333 |
| Income tax | ₹0 | ₹0 |
| Take-home (before PF/PT) | ₹10,00,000 | ₹83,333 |
Your employer should deduct zero TDS if you have declared the new regime and your projected income is ₹10 lakh. If TDS was already deducted (e.g. on bonuses pushing a month’s projection up), claim the refund when filing your ITR — no tax is actually due.
How the Section 87A rebate works
- Available to resident individuals with total taxable income up to ₹12,00,000 under the new regime in FY 2026-27.
- Rebate = your slab tax, capped at ₹60,000. At ₹10 lakh the slab tax is ₹40,000, so the full ₹40,000 is rebated.
- Not available against income taxed at special rates (e.g. equity capital gains under Sections 111A/112A). If you have large capital gains on top of salary, compute separately.
- The rebate vanishes entirely above ₹12 lakh — that is where marginal relief takes over instead.
Old regime vs new regime at ₹10 lakh
This is not even close. Under the old regime, a ₹10 lakh salary with typical deductions (80C ₹1.5L + standard deduction ₹50,000) leaves ₹8,00,000 taxable:
| Old regime | New regime | |
|---|---|---|
| Taxable income | ₹8,00,000 | ₹9,25,000 |
| Tax + cess | ₹75,400 | ₹0 |
| Deductions needed | ₹2,00,000+ | None |
The new regime wins by ₹75,400 with zero paperwork. The old regime only competes at ₹10 lakh with extraordinarily large HRA + home-loan + 80D deductions — rare at this income level.
Do you need to do anything to save tax at ₹10 lakh?
Honestly: no. Your tax is already zero. Common tax-saving moves are pointless here:
- 80C investments (PPF/ELSS/LIC): give no extra benefit — there is no tax left to save. Invest for your goals, not for tax.
- Employer NPS (80CCD(2)): the only deduction surviving in the new regime, but at ₹10 lakh it cannot reduce a zero liability. Still worth it for retirement corpus, not tax.
- Regime choice: stay in the new regime (it is the default). Opting for the old regime would create a tax bill of ~₹75,400.
The one thing to check: make sure your employer has your correct regime declaration so no unnecessary TDS is cut.
Common mistakes to avoid
- Opting for the old regime out of habit — at ₹10 lakh it converts zero tax into ~₹75,400 of tax.
- Forgetting the standard deduction in manual calculations (salaried only).
- Assuming 87A needs a separate claim form — it is automatic in the ITR computation.
- Ignoring special-rate income — capital gains do not get the rebate; do not mix them into the slab calculation.
- Not revising Form 12BB / regime declaration with the employer, leading to excess TDS.
Frequently asked questions
Do I pay any tax on ₹10 lakh salary in the new regime?
No. Your slab tax of ₹32,500 (after standard deduction) is fully covered by the Section 87A rebate. Tax payable is zero.
What is the 87A rebate limit in the new regime for FY 2026-27?
Up to ₹60,000, for resident individuals with taxable income up to ₹12 lakh.
I have no investments at all. Which regime should I choose?
The new regime — zero tax with no paperwork. The old regime would cost ~₹75,400 even after 80C.
Does the rebate apply if I also earn bank interest?
Yes, as long as your total taxable income stays within ₹12 lakh and is taxed at normal slab rates.
What if my income rises to ₹12 lakh?
Still zero — the rebate covers taxable income up to ₹12 lakh (₹12.75 lakh for salaried). See our 12 lakh guide.
Is the ₹75,000 standard deduction automatic?
For salaried income, yes — it’s applied before slab rates in both regimes (₹75,000 new, ₹50,000 old).
Do freelancers get the 87A rebate?
Yes — it’s available to all resident individuals, not just salaried. Only the standard deduction is salary-specific.
Will I get a refund if my employer deducted TDS?
Yes. File your ITR showing zero liability; the excess TDS comes back as a refund with interest under Section 244A.
Is ₹10 lakh income exempt from filing ITR?
No — exemption from tax isn’t exemption from filing. If your gross income exceeds the basic exemption limit (₹4 lakh in the new regime), you must file.
Has Budget 2026 changed anything for this slab?
No. Budget 2026 left all slab rates, the rebate, and the standard deduction unchanged for FY 2026-27.
Sources & methodology
- Slab rates, 87A rebate (₹60,000 / ₹12L), and standard deduction (₹75,000) per the Income-tax Act as amended up to Budget 2026; cross-checked with the methodology of the official Income Tax Department calculator.
- Old-regime comparison uses FY 2026-27 old slabs (2.5L nil / 5% / 20% / 30%) + 4% cess.
Last reviewed: October 2026. This guide is for information only and is not professional tax advice. Verify figures with the official department calculator before filing.
