Tax on ₹20 Lakh Salary: New vs Old Regime + In-Hand Pay
Crossing the ₹20 Lakh (20 LPA) salary mark is a major achievement, putting you in the high-income bracket. However, it also means a large portion of your income now falls into the dreaded 30% tax slab. For FY 2025-26, choosing the right regime is no longer optional—it's essential to protect your wealth.
For a ₹20 Lakh salary, the New Tax Regime is generally the winner. Your total tax will be approx ₹2,62,600.
If you earn ₹20 lakh per year in India, your take-home salary is roughly ₹1.34 Lakhs per month under the New Tax Regime.
| Annual Salary | ₹20,00,000 |
| Tax (New Regime) | ₹2,62,600 |
| Monthly In-Hand | ₹1,34,583 |
| Best Regime | New |
Check Your Specific Case:
Includes 80C, 80D, HRA, Home Loan Interest etc.
New Regime saves you ₹1,35,200 🎉
Monthly In-Hand Breakdown
| Component | New Regime | Old Regime |
|---|---|---|
| Gross Salary | ₹1,66,666 | ₹1,66,666 |
| Less: PF (Est.) | - ₹10,000 | - ₹10,000 |
| Less: Prof Tax | - ₹200 | - ₹200 |
| Less: TDS | - ₹21,883 | - ₹34,450 |
| In-Hand Salary | ₹1,34,583 | ₹1,22,016 |
*Old Regime calculation assumes NO other deductions except standard deduction.
Where Does Your ₹20,00,000 Go?
Disposable income.
New Regime Tax.
Compulsory savings.
Tax Calculation (New Regime)
Taxable Income: ₹20,00,000 - ₹75,000 = ₹19,25,000.
| Slab | Rate | Tax |
|---|---|---|
| 0 - 3L | Nil | 0 |
| 3L - 7L | 5% | ₹20,000 |
| 7L - 10L | 10% | ₹30,000 |
| 10L - 12L | 15% | ₹30,000 |
| 12L - 15L | 20% | ₹45,000 |
| 15L - 19.25L | 30% | ₹1,27,500 |
| Total + Cess(4%) | - | ₹2,62,600 |
New vs Old Regime
| Feature | New Regime | Old Regime (No Ded.) |
|---|---|---|
| Tax Payable | ₹2,62,600 | ₹4,13,400 |
| Savings | New Regime saves you ₹1,50,800 | |
The Break-Even Point
To make the Old Regime worth it, you need substantial deductions.
₹4,85,000
If your total deductions (80C, HRA, etc.) exceed this amount, switch to Old Regime. Otherwise, stick to New Regime.
Which Regime Should You Choose?
Claims 80C and minimal health insurance.
- Rent: ₹0
- 80C: ₹1.5L
- 80D: ₹25k
Pays high rent/EMI + 80C + NPS.
- Home Loan Int: ₹2L
- 80C: ₹1.5L
- 80D: ₹25k
- NPS: ₹50k
Conclusion
For a ₹20 Lakh salary, the New Tax Regime remains the default winner for most professionals. It offers simplicity and a higher monthly in-hand of ~₹1.34 Lakhs. Only consider switching if you have a large Home Loan or HRA claim.
Fincado Research Team
Fact CheckedOur analysis is built on deep-dive research into RBI Benchmarks and lender-specific disclosures. We verify every interest rate and fee structure against real-world borrower approvals to ensure the highest level of accuracy for Indian home buyers.
Calculations are based on income tax slabs for FY 2025-26 applicable to resident individuals below 60 years.