No Income Tax up to 7.5 Lakh with Tax Rebate 87A

No income tax will be paid by you if your income is Rs. 7.5 Lakh in FY 2023-24. How? You get standard deduction of Rs. 50,000 (if salaried or pensioner) so taxable income becomes Rs. 7 Lakh. Next, based on the new tax regime, your income tax is Rs. 25,000 on 7 lakh taxable income. This tax is cancelled due to rebate you get of maximum Rs. 25,000 with new tax regime under section 87A so you pay no income tax.

We will see these calculations with examples and compare old and new regime as well. Also you can download the income tax excel calculator from bottom of this article.

No Income Tax with Tax Rebate under Section 87A Video

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As seen in above video, standard deduction of Rs. 50,000 was introduced in FY 2023-24 with new regime as well. Apart from this, Tax Rebate limit was also extended to Rs. 7 lakh income on new regime.

How to Calculate Taxable Income?

To calculate income tax, you need to calculate taxable income on which actual tax is calculated.

Taxable income calculation formula is:

Taxable Income = Gross Income – Investments

While you can make investments and deductions with old regime, but new regime does not allow deductions except standard deduction of Rs. 50,000 applicable from FY 2023-24 onwards.

So below is the table of calculations with Old and new regime.

Item	Old Regime	New Regime
Gross Income	Rs. 7,50,000	Rs. 7,50,000
Standard Deduction	Rs. 50,000	Rs. 50,000
Other Deductions	Rs. 0 (options available)	Rs. 0
Taxable Income	Rs. 7,00,000	Rs. 7,00,000
Tax Rebate under Section 87A	Rs. 0	Rs. 25,000
Income Tax	Rs. 54,600	Rs. 0

No Income Tax up to Rs. 7.5 Lakh

Important points about above calculation table:

These calculations are applicable for FY 2023-24 onwards
Standard Deduction is available in both tax regimes
Note that you get more deduction options to save income tax with old regime that you can consider
Tax Rebate limit for Old tax regime is still Rs. 5 Lakh, on which no income tax need to be paid. If taxable income is above 5 lakh than tax rebate is not available with old regime
Tax Rebate limit in New tax regime is Rs. 7 lakh, which means no income tax on taxable income up to Rs. 7 lakh in FY
You can use below income tax calculator to know how tax is calculated with old and new regimes

Income Tax Slab Rates for FY 2023-24

Let us now see the income tax slab rates for FY 2023-24:

Old Tax Regime

Income	Tax Slab Rates (Old Tax Regime)
Rs. 0 – Rs. 2.5 Lakh	0%
Rs. 2.5 Lakh – Rs. 5 Lakh	5%
Rs. 5 Lakh – Rs. 10 Lakh	20%
Rs. 10 Lakh or above	30%

Income Tax Slab Rates in India for age up to 60 years (Old Tax Regime)

New Tax Regime

Income	Tax Slab Rates (New Tax Regime)
Rs. 0 – Rs. 3 Lakh	0%
Rs. 3 Lakh – Rs. 6 Lakh	5%
Rs. 6 Lakh – Rs. 9 Lakh	10%
Rs. 9 Lakh – Rs. 12 Lakh	15%
Rs. 12 Lakh – Rs. 15 Lakh	20%
Rs. 15 Lakh or above	30%

Income Tax Slab Rates in India for age up to 60 years (New Tax Regime)

Above are the Income tax slab rates for FY 2023-24 for age up to 60 years. Note that on income of 7.5 lakh, you belong to 20% slab rate with old regime but 10% slab rate with new regime.

New tax regime have reduced tax slab rates but do not allow much deductions except standard deduction to salaried and pensioners only.

ALSO READ: Income Tax Slab Rates for all age groups

No Income Tax up to Rs. 7.5 Lakh Calculation

Let us now see how income tax will be zero with 7.5 lakh income. Below is the screenshot from excel calculator:

As seen above, for income of 7.5 lakh and investments of Rs. 50,000 (standard deduction), taxable income becomes 7 lakh with both tax regimes.

And slab wise details are also mentioned in the above image.

Tax rebate is Rs. 0 with old regime since taxable income goes above Rs. 5 lakh. Note that if taxable income goes above 5 lakh, you have to pay 5% tax as well in 5% slab. So total income tax is Rs. 54,600 with old tax regime. You get maximum tax rebate of Rs. 12,500 with old regime if taxable income is 5 lakh or below.

With new regime, since taxable income is 7 lakh, tax rebate of maximum Rs. 25,000 is applicable so zero tax with new regime.

ALSO READ: Old vs New Tax Regime Which is Better

Download Income Tax Calculator FY 2023-24 in Excel

Fill below form to download income tax calculator in excel shown above:

In which income there is no tax?

Based on above calculations, if your income is 5 lakh or below, you don’t have to pay tax with old regime. And with new regime, for income up to Rs. 7 lakh, there is no income tax.

Here, you don’t have to make any investments as well to make your tax zero.

How can I pay zero tax in India?

If you are selecting old regime, you have to get your income below 5 lakh to pay zero tax. And with new regime, your income must be below 7 lakh for zero tax in FY 2023-24.

Conclusion

So to conclude, below are the key important points:

Based on your income and investments, your tax regime must be selected
Old regime helps you to save income tax with multiple investment options
New tax regime has reduced tax slab rates
If your income is up to 11 lakh, still you don’t have to pay income tax with various investments = Rs. 6 lakh
Tax rebate limit in old regime is Rs. 12,500 (Rs. 5 lakh income) and Rs. 25,000 (Rs. 7 lakh income)

Comment below which tax regime you will choose and why

Some more Reading

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Use Retirement Excel Calculator that will help you to Retire Early.
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Income Tax Calculator App – FinCalC

For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.

What you can do with this mobile App?

Calculate Income Tax for new FY 2024-25 and previous FY 2023-24
Enter estimated Investments to check income tax with Old and New Tax Regime
Save income tax details and track regularly
Know how much to invest more to save income tax
More calculators including PPF, SIP returns, Savings account interest and lot more

Download Income Tax Calculator APP from play store

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