No Tax on ₹15.5 Lakh Income? New Tax Regime Explained
Discover how to possibly pay zero tax on an income of ₹15.5 lakh under the new tax regime with strategic income tax planning. The Income Tax Department extended the ITR filing deadline to September 15, 2025, making now the time to optimize your financial strategy. Learn how to leverage approved reimbursements, NPS and EPF contributions, and home loan interest deductions to substantially reduce your taxable income. Taxpayers can aim to bring their taxable income below ₹12 lakh, or ₹12.75 lakh with the standard deduction, to achieve zero tax liability. News Directory 3 is here to help guide you through strategies for reducing your tax burden. Find out how strategic investment and home loan benefits can make a real difference. discover what’s next in tax planning.
Income Tax Planning: Achieve Zero Tax Under teh New Regime
The Income Tax Department has extended the ITR filing deadline for FY25 (AY26) to Sept. 15, 2025. Taxpayers are navigating the old and new tax regimes,each with distinct implications for their financial planning. This analysis explores how to potentially reduce your tax liability to zero on an annual income of ₹15.5 lakh under the new tax regime for FY26 (AY27) through strategic income tax planning.
Under the new regime, reducing taxable income to ₹12 lakh—or ₹12.75 lakh with the standard deduction—is key to achieving zero tax. Consider an employee with a gross salary of ₹15.5 lakh,including a basic pay of ₹7.75 lakh, which typically constitutes 40-50% of the cost to company.
Strategic investments and claiming applicable reimbursements are crucial for effective income tax planning. Here’s a breakdown:
- Basic Pay: ₹775,000
- Approved reimbursements: ₹100,000
- NPS (National Pension System): ₹108,500
- EPF (Employee Provident Fund): ₹21,600 (minimum)
tax planners note that home loans offer tax advantages under both tax systems, though the specifics vary.
Deductions for Home Loans
While the new tax regime features lower rates, it largely eliminates exemptions. However, strategic use of available deductions can significantly lower taxable income.
If the property is rented out, taxpayers can deduct up to ₹2 lakh of interest paid on the home loan from rental income, reducing their taxable income. Interest deductions are unlimited for let-out properties, but there are no deductions for self-occupied properties.
After factoring in NPS contributions, EPF deductions, approved reimbursements, and home loan set-offs, the taxable income can fall below ₹12 lakh, resulting in zero tax liability.
Tax planners advise that while home loan benefits are notable, they should not be the sole determinant when choosing a tax regime. Other factors should be carefully considered for optimal income tax planning.