Last updated: 2026-10-21 · FY 2026-27 (AY 2027-28) rules
New regime vs old regime for ₹20 lakh
The new regime is cheaper, even if you claim 80C, 80D, NPS and ₹2 lakh of home loan interest in the old regime.
| Scenario | Taxable income | Yearly tax | Monthly |
|---|---|---|---|
| New regime | ₹19,25,000 | ₹1,92,400 | ₹16,033 |
| Old regime, no deductions | ₹19,47,600 | ₹4,12,651 | ₹34,388 |
| Old regime, 80C ₹1.5L + 80D ₹25k | ₹17,72,600 | ₹3,58,051 | ₹29,838 |
| Old regime, + NPS ₹50k + home loan interest ₹2L | ₹15,22,600 | ₹2,80,051 | ₹23,338 |
For the old regime to match the new one at this salary, you'd need about ₹7,06,000 of deductions in total (80C, 80D, HRA, home loan interest and so on), on top of the standard deduction.
New regime calculation, step by step
| Gross salary | ₹20,00,000 |
|---|---|
| Standard deduction | − ₹75,000 |
| Taxable income | ₹19,25,000 |
| Tax as per slabs | ₹1,85,000 |
| Cess (4%) | ₹7,400 |
| Total tax | ₹1,92,400 |
Slab-wise tax (new regime)
| Slab | Rate | Income in slab | Tax |
|---|---|---|---|
| ₹0 – ₹4,00,000 | Nil | ₹4,00,000 | ₹0 |
| ₹4,00,000 – ₹8,00,000 | 5% | ₹4,00,000 | ₹20,000 |
| ₹8,00,000 – ₹12,00,000 | 10% | ₹4,00,000 | ₹40,000 |
| ₹12,00,000 – ₹16,00,000 | 15% | ₹4,00,000 | ₹60,000 |
| ₹16,00,000 – ₹20,00,000 | 20% | ₹3,25,000 | ₹65,000 |
Monthly in-hand salary
If ₹20 lakh is your gross salary, you'd take home about ₹1,48,633 a month under the new regime, after ₹1,800 employee PF, ₹200 professional tax and ₹16,033 income tax. If ₹20 lakh is your CTC, your take-home will be a little lower. Check it with the in-hand salary calculator.
Frequently asked questions
How much tax do I pay on a ₹20 lakh salary?
₹1,92,400 a year under the new regime, including 4% cess. That's an effective rate of 9.6% on your salary.
Which tax regime is better for a ₹20 lakh salary?
The new regime. Even with 80C, 80D, NPS and ₹2 lakh of home loan interest, the old regime costs ₹2,80,051 compared with ₹1,92,400 in the new regime.
How much tax is deducted from my salary every month?
About ₹16,033 a month under the new regime, as your employer spreads the yearly tax evenly. It can change if you submit investment proofs or get a bonus.