Old vs New Tax Regime for Rs. 20 Lakh Income
FY 2026-27 comparison - Which regime saves you more tax?
New Regime Tax
Rs. 1.92 lakh
Std ded Rs. 75k + 87A rebate
9.62% effective rate
Better for youOld Regime Tax
Rs. 2.34 lakh
With typical Rs. 5.75 lakh deductions
11.7% effective rate
Annual saving
Rs. 41,600
by choosing New Regime
Typical deductions assumed for old regime
Old regime wins if deductions exceed Rs. 4.5 lakh (home loan + HRA + 80C)
Customize with your actual deductions
₹20 L
Old regime deductions (irrelevant in new regime)
₹1.50 L · max ₹1.5L
₹1.20 L · actual exempt amount
₹25,000 · max ₹25K (₹50K if senior citizen)
max ₹2L self-occupied
max 10% of basic salary
New Regime
Better for you₹1.92 L
Effective rate: 9.62%
Old Regime
₹3.21 L
Effective rate: 16.07%
Old regime break-even: ₹7.08 L in total deductions (above standard deduction). You need ₹4.13 L more to tip the scales.
New Regime saves you ₹1.29 L in taxes
Your deductions are not large enough to offset the new regime's lower slab rates and higher standard deduction.
Old vs New Regime at Rs. 20 Lakh, side by side
| New Regime | Old Regime* | |
|---|---|---|
| Standard deduction | Rs. 75,000 | Rs. 50,000 |
| Other deductions assumed | Rs. 0 | Rs. 5.75 lakh |
| Taxable income | Rs. 19.25 lakh | Rs. 13.75 lakh |
| Total tax | Rs. 1.92 lakh | Rs. 2.34 lakh |
| Effective tax rate | 9.62% | 11.7% |
*Old regime assumes typical deductions of Rs. 5.75 lakh (80C + HRA + 80D, plus any home-loan/NPS shown above). Your actual old-regime tax depends on what you claim. The old regime only beats the new one once your total deductions cross about Rs. 7.13 lakh.
Break-even deductions at Rs. 20 Lakh
Deductions needed for old regime to win
Rs. 7.13 lakh
over & above the Rs. 50k standard deduction
Scanning the old-regime tax as deductions rise, the old regime matches or beats the new regime's Rs. 1.92 lakh once your total old-regime deductions reach about Rs. 7.13 lakh. Below that, the new regime is cheaper; above it, the old regime pulls ahead. The Rs. 5.75 lakh of deductions assumed here give an old-regime tax of Rs. 2.34 lakh.
Rate and take-home at Rs. 20 Lakh (new regime)
Marginal tax rate
20%
on your next Rs. 100 earned
Effective tax rate
9.62%
tax ÷ gross income
Avg. monthly (after tax)
Rs. 1.51 lakh
≈ Rs. 16,033/mo TDS, before EPF
Your taxable income of Rs. 19.25 lakh reaches the 20% slab, so a raise is taxed at 20% plus cess at the margin — yet your effective rate is only 9.62% because the lower slabs are taxed at 0% to 15%. The monthly figure deducts income tax only; EPF (12% of basic), professional tax and other components reduce actual in-hand further. Use the Salary Calculator for a full take-home breakdown.
FAQs - Rs. 20 Lakh Tax Regime
Which tax regime is better for Rs. 20 Lakh salary in FY 2026-27?▾
For Rs. 20 Lakh gross income in FY 2026-27: new regime tax is Rs. 1.92 lakh (9.62% effective, with the Rs. 75,000 standard deduction and 87A rebate where it applies). Old regime tax is Rs. 2.34 lakh (11.7% effective, with typical deductions of Rs. 5.75 lakh covering 80C + HRA + 80D). The new regime saves Rs. 41,600 here. At Rs. 20L, a home loan changes the math significantly. Without home loan interest, new regime typically wins. With max deductions (Rs. 5L+), old regime can save Rs. 40-60k.
How much deduction do I need for the old regime to beat the new regime at Rs. 20 Lakh?▾
Scanning the old-regime tax at rising deduction levels, the old regime matches or beats the new regime's Rs. 1.92 lakh once your total deductions (over and above the Rs. 50,000 standard deduction) reach about Rs. 7.13 lakh. That is the break-even — below it the new regime is cheaper, above it the old regime pulls ahead. With the Rs. 5.75 lakh of typical deductions assumed here, the old regime tax is Rs. 2.34 lakh.
What is the income tax on Rs. 20 Lakh in the new regime?▾
New regime tax on Rs. 20 Lakh gross income (FY 2026-27): the Rs. 75,000 standard deduction reduces taxable income to Rs. 19.25 lakh, taxed on the progressive slabs (0/5/10/15/20/25/30% in Rs. 4 lakh bands). No 87A rebate applies at this income. After 4% health and education cess, the total tax payable is Rs. 1.92 lakh — an effective rate of 9.62%.
What is the income tax on Rs. 20 Lakh in the old regime?▾
Under the old regime with typical deductions of Rs. 5.75 lakh (80C Rs. 1.5L + HRA + 80D, and any home-loan or NPS shown above), your Rs. 50,000 standard deduction plus those deductions bring taxable income to Rs. 13.75 lakh. Taxed on the old slabs (0/5/20/30%) plus 4% cess, the old regime tax is Rs. 2.34 lakh — an effective rate of 11.7%. Claim less than assumed and this figure rises.
What is my marginal vs effective tax rate at Rs. 20 Lakh (new regime)?▾
At Rs. 20 Lakh, your taxable income of Rs. 19.25 lakh reaches the 20% slab, so each additional Rs. 100 you earn is taxed at 20% plus cess — that is your marginal rate. Your effective (average) rate is only 9.62%, because the lower slabs are taxed at 0% to 15%. The gap between the two is why a raise is never taxed at your headline slab rate on the whole salary.
What is the approximate monthly in-hand for Rs. 20 Lakh under the new regime?▾
After income tax alone under the new regime, Rs. 20 Lakh works out to about Rs. 1.51 lakh per month on average (Rs. 18.08 lakh a year). Your employer would deduct roughly Rs. 16,033 a month as TDS. This is before EPF (12% of basic), professional tax and any other salary components — use the Salary Calculator for an exact take-home figure.
Which deductions reduce old-regime tax the most at Rs. 20 Lakh?▾
Deductions only help under the old regime. The most effective at Rs. 20 Lakh are Section 80C (up to Rs. 1.5 lakh — EPF, PPF, ELSS, life insurance), HRA exemption under Section 10(13A), Section 80D health insurance (Rs. 25,000–Rs. 75,000), home-loan interest under Section 24(b) (up to Rs. 2 lakh), the extra Rs. 50,000 NPS deduction under 80CCD(1B), and employer NPS under 80CCD(2). The new regime instead gives a flat Rs. 75,000 standard deduction and lower slab rates.
Does surcharge affect Rs. 20 Lakh income?▾
No. Surcharge only starts once total income crosses Rs. 50 lakh, and Rs. 20 Lakh is at or below that threshold, so no surcharge applies. Only the 4% health and education cess is added on top of the slab tax. Note that above Rs. 50 lakh the new regime caps surcharge at 25% versus 37% in the old regime.