Tax on ₹8 Lakh Salary (2025): The ₹7 Lakh Tax-Free Trap Explained
Earning ₹8 Lakhs (8 LPA) is a tricky spot in the Indian tax system. You are just barely above the tax-free limit. A difference of ₹25,000 in salary can suddenly trigger a tax bill of over ₹23,000.
For a ₹8 Lakh salary, the New Tax Regime is the winner. You will pay approx ₹23,400 in tax.
If you earn ₹8 lakh per year, your take-home salary is roughly ₹61,000 per month.
Verify with our Calculator:
Includes 80C, 80D, HRA, Home Loan Interest etc.
New Regime saves you ₹41,600 🎉
The "8 Lakh" Trap Explained
- Scenario A: Salary ₹7.75 Lakhs
Minus ₹75k Std Deduction = Net Income ₹7.00 Lakhs.
Tax = ZERO (Due to 87A Rebate). - Scenario B: Salary ₹8.00 Lakhs
Minus ₹75k Std Deduction = Net Income ₹7.25 Lakhs.
Tax = ₹23,400.
Result: Earning that extra ₹25,000 basically costs you ₹23,400 in taxes. You only keep ₹1,600 of your raise!
Monthly In-Hand Breakdown
| Component | New Regime | Old Regime |
|---|---|---|
| Gross Salary | ₹66,666 | ₹66,666 |
| Less: PF (Est.) | - ₹3,600 | - ₹3,600 |
| Less: Prof Tax | - ₹200 | - ₹200 |
| Less: TDS | - ₹1,950 | - ₹5,416 |
| In-Hand Salary | ₹60,916 | ₹57,450 |
Tax Calculation (New Regime)
Taxable Income: ₹8,00,000 - ₹75,000 = ₹7,25,000.
| Slab | Rate | Tax |
|---|---|---|
| 0 - 3L | Nil | 0 |
| 3L - 7L | 5% | ₹20,000 |
| 7L - 7.25L | 10% | ₹2,500 |
| Total + Cess(4%) | - | ₹23,400 |
The Break-Even Point
To beat the New Regime tax of ₹23,400, you need total deductions in the Old Regime exceeding:
₹2,60,000
If your [80C + HRA + 80D + Home Loan Interest] is more than ₹2.6 Lakhs, switch to Old Regime. Otherwise, stick to New Regime.
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.