Tax on ₹18 Lakh Salary: New vs Old Tax Regime (FY 2025-26)
Earning ₹18 Lakhs (18 LPA) is a major milestone. Under the New Tax Regime (FY 2025-26), your taxable income after the ₹75,000 Standard Deduction is ₹17.25 Lakhs. Since this exceeds the ₹12 Lakh rebate limit, you pay tax of ₹1,50,800 — still significantly lower than the Old Regime.
For a ₹18 Lakh salary, the New Tax Regime is the clear winner. Your total tax will be ₹1,50,800.
Check Your Specific Case:
Includes 80C, 80D, HRA, Home Loan Interest etc.
New Regime saves you ₹2,00,200 🎉
Monthly In-Hand Breakdown
| Component | New Regime (Recommended) | Old Regime (No Deductions) |
|---|---|---|
| Gross Salary | ₹1,50,000 | ₹1,50,000 |
| Less: PF (Est.) | - ₹9,000 | - ₹9,000 |
| Less: Prof Tax | - ₹200 | - ₹200 |
| Less: TDS (Tax) | - ₹12,567 | - ₹29,250 |
| In-Hand Salary | ₹1,28,233 | ₹1,11,550 |
*PF is assumed at 12% of Basic Salary (Basic assumed as 50% of CTC).
Where Does Your ₹18,00,000 Go?
Annual take-home pay.
New Regime Tax.
Compulsory savings.
Tax Calculation (New Regime – FY 2025-26)
Taxable Income: ₹18,00,000 - ₹75,000 = ₹17,25,000.
| Slab | Rate | Tax |
|---|---|---|
| 0 - ₹4 Lakhs | Nil | ₹0 |
| ₹4 Lakhs - ₹8 Lakhs | 5% | ₹20,000 |
| ₹8 Lakhs - ₹12 Lakhs | 10% | ₹40,000 |
| ₹12 Lakhs - ₹16 Lakhs | 15% | ₹60,000 |
| ₹16 Lakhs - ₹17.25 Lakhs | 20% | ₹1.25 Lakhs × 20% = ₹25,000 |
| Gross Tax | - | ₹1,45,000 |
| Less: Rebate 87A | - | ₹0 (limit exceeded) |
| Net Payable (+4% cess) | - | ₹1,50,800 |
The Break-Even Point
To beat the New Regime tax of ₹1,50,800, you need total deductions exceeding:
₹6,40,000
This usually needs full 80C + 80D + NPS plus very high HRA/home-loan benefits. For most people at 18 LPA, New Regime remains simpler and better.
Conclusion
For a ₹18 Lakh salary, the New Tax Regime is the most efficient option for most taxpayers. It saves you roughly ₹2.00 Lakhs versus the Old Regime (no deductions), with simpler compliance.
This content is prepared and reviewed using RBI circulars, official lender disclosures, and current Indian tax references. Numbers are educational estimates, not personalized advice.
Apr 2026
Source cross-check and periodic QA
Actual outcomes can vary by borrower profile, bank policy, market conditions, and future rule changes. Validate important decisions with a certified professional.
Calculations are based on income tax slabs for FY 2025-26 applicable to resident individuals below 60 years.