With Deductions like PF, House rent, Insurance You can reduce tax.

 

1️⃣ New Tax Regime (Default in India now)

Under the new regime, there is a standard deduction of ₹50,000 for salaried individuals.

Calculation:

• Annual income = ₹7,00,000

• Standard deduction = ₹50,000

• Taxable income = ₹6,50,000

Tax slabs (new regime):

• Up to ₹3,00,000 → 0%

• ₹3,00,001 – ₹6,00,000 → 5%

• ₹6,00,001 – ₹9,00,000 → 10%

Tax calculation:

• ₹3,00,000 → 0

• ₹3,00,000 × 5% = ₹15,000

• ₹50,000 × 10% = ₹5,000

Total tax = ₹20,000

But because your income is below ₹7 lakh, you get Section 87A rebate.

✅ Final tax = ₹0

So if your total income is ₹7,00,000 or less, you pay zero income tax (after rebate).

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2️⃣ Old Tax Regime

Old regime slabs:

• Up to ₹2,50,000 → 0%

• ₹2,50,001 – ₹5,00,000 → 5%

• ₹5,00,001 – ₹10,00,000 → 20%

But there is rebate under Section 87A up to ₹5 lakh income only.

If taxable income is ₹7 lakh without deductions, you may pay about ₹52,500 tax.

However, with deductions like:

• 80C (₹1.5L) – PPF, ELSS, LIC

• 80D – health insurance

• HRA

• Standard deduction

You can reduce tax.

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✅ Simple answer:
If your income is ₹7 lakh and you use the New Tax Regime → Tax = ₹0.