# Income Tax on 12 Lakh Salary FY 2026-27: Nil, Explained > Is a INR 12 lakh salary tax-free in FY 2026-27? In the new regime the 87A rebate covers it, and up to INR 12.75 lakh pays nothing. See the maths and the cliff. Source: https://trykosh.com/tools/income-tax-on-12-lakh-salary Free tool - Income tax # Income tax on a INR 12 lakh salary: is it really zero? Yes: a INR 12 lakh salary pays no tax in the new regime, and so does anything up to INR 12.75 lakh. Here's the maths, and what happens just above. Rules checked 25 October 2026Free - no sign-upRuns in your browser New regime saves you INR 86,840 Tax: INR 0 a year, INR 0 a month New regime**INR 0** Old regime**INR 86,840** Effective rate**0%** Gross income INR 12,00,000 − Standard deduction INR 75,000 Taxable income INR 11,25,000 Tax on slabs INR 52,500 − Rebate (87A) INR 52,500 \+ Health & education cess (4%) INR 0 Total tax INR 0 Side by side New regime Old regime Gross income INR 12,00,000 INR 12,00,000 Deductions INR 75,000 INR 3,45,000 Taxable income INR 11,25,000 INR 8,55,000 Tax on slabs INR 52,500 INR 83,500 Rebate (87A) INR 52,500 INR 0 Surcharge INR 0 INR 0 Cess (4%) INR 0 INR 3,340 Total tax INR 0 INR 86,840 Marginal rate 0% 20% The new regime is the default: you don't need to do anything to get it. ## Upload your statement and Kosh does this for you. Upload a bank statement or salary slip and Kosh works out your tax under both regimes from your real numbers, finds the deductions you're missing and reminds you before every deadline. [Start free](/signup?via=tool-income-tax-on-12-lakh-salary) ## How the tax on INR 12 lakh salary works Your taxable income is salary minus the INR 75,000 standard deduction: INR 11.25 lakh. Slab tax on that is INR 52,500, and section 87A gives a rebate of up to INR 60,000 to anyone with taxable income up to INR 12 lakh. So the tax is fully rebated. The limit is on taxable income, which is why the salary threshold is INR 12.75 lakh. Above that, tax starts, but marginal relief caps it at the amount you exceed INR 12 lakh of taxable income until about INR 13.45 lakh of salary, after which normal slab tax applies (INR 74,100 at INR 13.5 lakh). The old regime is far worse at this level: about INR 86,840 even with INR 1.5 lakh of 80C, health insurance and HRA. Unless you have very large deductions, INR 12 lakh earners should be in the new regime. ## Worked example: Rohan earns exactly INR 12.75 lakh Rohan's salary of INR 12.75 lakh is the highest that pays no tax: after the standard deduction his taxable income is exactly INR 12 lakh, where the INR 60,000 rebate covers the slab tax. In the old regime, with typical deductions, he'd pay INR 1,00,880. New regime saves you INR 1,00,880 Tax: INR 0 a year, INR 0 a month New regime**INR 0** Old regime**INR 1,00,880** Effective rate**0%** Gross income INR 12,75,000 − Standard deduction INR 75,000 Taxable income INR 12,00,000 Tax on slabs INR 60,000 − Rebate (87A) INR 60,000 \+ Health & education cess (4%) INR 0 Total tax INR 0 The new regime is the default: you don't need to do anything to get it. [Load this example into the calculator ->](?salary=1275000&basic=637500&hra=255000&rent=191250#calculator) ## Good to know - Equity capital gains don't get the rebate: someone with INR 11 lakh salary and INR 2 lakh of short-term gains pays 20% on the gains. - If a raise or bonus will take you over INR 12.75 lakh, ask for part of it as employer NPS, which is deductible in the new regime. - Interest on savings and FDs counts toward the INR 12 lakh too. ## Frequently asked questions Is INR 12 lakh income tax-free in FY 2026-27? Yes, under the new regime. Taxable income up to INR 12 lakh gets a full rebate under section 87A, and salaried people also get the INR 75,000 standard deduction, so salary up to INR 12.75 lakh is tax-free. What if my salary is INR 13 lakh? Taxable income is INR 12.25 lakh. Slab tax would be INR 63,750, but marginal relief caps it at INR 25,000, so you pay INR 26,000 with cess. Is INR 12 lakh tax-free in the old regime? No. The old regime's rebate stops at INR 5 lakh of taxable income. With typical deductions, INR 12 lakh salary pays around INR 85,000 to INR 90,000. What is the in-hand salary for INR 12 lakh CTC? About INR 85,000 a month with basic at half of CTC, PF on full basic and gratuity in the CTC, since income tax is nil. ## Sources and assumptions - [Income Tax Department](https://www.incometax.gov.in/) - [Union Budget 2026-27](https://www.indiabudget.gov.in/) Rules and rates last checked on 25 October 2026. Results are estimates for planning and education, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting.