Salary tax planning · ₹20 lakh · FY 2025-26
Tax planning for a ₹20 lakh salary
On a ₹20 lakh salary, the new regime is cheaper for a typical filer — about ₹1,92,400 in tax for FY 2025-26. Here is the full old-vs-new comparison and the deductions worth claiming.
Your tax at a glance
New regime
₹1,92,400
After ₹75,000 standard deduction
Old regime (full deductions)
₹2,80,800
With ₹4,25,000 of deductions
Cheaper for you
New regime
Lower tax: ₹1,92,400
₹20 lakh salary: old vs new, side by side
| Scenario | Taxable income | Tax (incl. 4% cess) |
|---|---|---|
| New regime (₹75k standard deduction) | ₹19,25,000 | ₹1,92,400 |
| Old regime — 80C only (₹1.5L) | ₹18,00,000 | ₹3,66,600 |
| Old regime — full stack (₹4.25L) | ₹15,25,000 | ₹2,80,800 |
Your break-even
Which regime should you pick?
At ₹20 lakh, the new regime is cheaper for a typical filer: about ₹1,92,400 versus ₹2,80,800 under the old regime even with a full ₹4,25,000 deduction stack. The old regime only pulls ahead once your total deductions exceed roughly ₹7,10,000 — realistic mainly if you have significant HRA on top of a home loan and full 80C, NPS and 80D. Run your real numbers before deciding.
Deductions a ₹20 lakh earner should not miss
- Full 80C + 80CCD(1B); plus 80CCD(2) employer NPS, which survives in the new regime
- Section 24(b) home-loan interest, and HRA where you rent — the two biggest old-regime levers
- Section 80D at senior-citizen limits for parents
- Watch the ₹50 lakh surcharge threshold as total income rises
- At this level the regime gap is large — a wrong choice can cost well over ₹50,000
These figures are illustrative. The exact answer depends on your real Form 16, your rent and your investments — which is what a DrishtiTax review computes for you.
Frequently asked questions
Educational information
This page is general information for salaried taxpayers in India, not legal, financial or chartered-accountancy advice. Tax outcomes depend on your full, individual circumstances. Figures use FY 2025-26 (AY 2026-27) rules and may change. Verify against official sources or a qualified professional before acting.
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