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.
Nitin researches and writes all financial guides on Fincado, cross-checking figures against RBI circulars, official bank disclosures, and the Income Tax Act. Content on this site is independent analysis — not personalized financial advice.
Jun 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.