Zero Tax: Imagine earning ₹15.5 lakh annually and paying ZERO income tax! While the new tax regime offers a ₹75,000 standard deduction and increased rebates, achieving zero tax at this income level requires smart structuring. Here’s how it’s legally possible for FY 2025-26:

🔑 Key Features of New Tax Regime (FY 2025-26)

1. Same rates for all: General, senior, and super senior citizens

2. Higher Rebate: ₹0 tax if taxable income ≤ ₹12 lakh

3. Standard Deduction: ₹75,000 for salaried individuals

4. Tax Slabs:

   • Up to ₹4 lakh: 0%

   • ₹4-8 lakh: 5%

   • ₹8-12 lakh: 10%

   • ₹12-16 lakh: 15%

💡 The Zero-Tax Strategy: Salary Structuring

Here’s a real-case breakdown for ₹15.5 lakh CTC:

📝 Step-by-Step Tax Calculation

1. Gross Salary: ₹15,50,000

2. Minus Standard Deduction: -₹75,000

3. Taxable Base: ₹14,75,000

4. Minus Tax-Free Components:

   • Employer NPS: ₹1,05,700

   • Flexi Benefits: ₹2,94,300
     Total Deductions: ₹4,00,000

5. Final Taxable Income:
   ₹14,75,000 – ₹4,00,000 = ₹10,75,000

✅ Why is Tax Zero?

• Taxable income (₹10.75L) falls below ₹12 lakh threshold

• Rebate u/s 87A covers entire tax liability:

  • Tax on ₹10.75L = ₹20,000 (5% of ₹4L) + ₹27,500 (10% of ₹2.75L) = ₹47,500

  • Rebate allowed: ₹60,000 (covers ₹47,500)

• Net Tax Payable = ₹0

⚠️ Critical Conditions to Note

1. NPS Contribution: Employer’s NPS must be ≤14% of basic pay

2. Flexi Components: Must be legally exempt (e.g., HRA, LTA, medical allowance)

3. No Other Income: Strategy assumes no interest/dividend income

4. New Regime Only: Old regime deductions (80C, HRA) don’t apply

Also Check: Pay Zero Tax on ₹18.75 Lakh Salary: New Tax Regime Tricks (2025-26)

❓ FAQ: Zero Tax on ₹15.5 Lakh Salary

Q1: Is this legal?
A: Absolutely! It uses exemptions and rebates under the Income Tax Act.

Q2: Can senior citizens use this?
A: Yes! New regime has uniform rates for all age groups.

Q3: What if my company doesn’t offer NPS/flexi benefits?
A: Negotiate salary restructuring or use voluntary NPS (additional ₹50k u/s 80CCD(1B)).

Q4: Is ₹12 lakh taxable income the rebate limit?
A: Yes. For FY 2025-26, taxable income ≤ ₹12 lakh qualifies for full rebate.

Q5: Are FY 2024-25 slabs different?
A: Yes! Previous slabs:

• 0-3L: 0%

• 3-7L: 5%

• 7-10L: 10%

• 10-12L: 15%

Smart salary structuring + New regime benefits = Massive tax savings!
Share this with every salaried Indian! 💰✅

Pro Tip: Use employer-linked NPS for double benefit – tax-free contribution and compounding returns!

⚠️ Disclaimer: This illustration is for educational purposes. Tax outcomes depend on individual salary structures, investments, and applicable exemptions. Consult a CA before implementation. Tax laws are subject to change. The author/blog is not liable for financial decisions made based on this content.