Income Tax on ₹40 Lakh Salary: Calculator Scenario

At ₹40,00,000 gross, new-regime tax is ₹7,87,800 and old-regime tax is ₹8,42,400

At a gross annual salary of ₹40.00 L, your tax liability depends on which regime you choose and the deductions you can claim. Under the new regime, your effective tax rate is 19.7%, giving you a monthly take-home of ₹2.68 L.

Above the ₹12 lakh rebate, the new regime bills ₹7,87,800 at 19.7% effective

• Standard deduction: ₹75,000 (new) or ₹50,000 (old): automatically applied
• No 87A rebate under new regime: taxable income exceeds ₹12 lakh threshold
• New regime is simpler: no investment proofs or paperwork needed
• 4% Health & Education Cess applies on top of computed tax

From ₹40,00,000 gross, the new regime's ₹75,000 standard deduction leaves ₹39,25,000 taxable

1. Start with gross salary: ₹40.00 L
2. Subtract standard deduction (₹75K new / ₹50K old) + other deductions (old only)
3. Apply progressive tax slabs to taxable income
4. Check if Section 87A rebate applies (taxable ≤ ₹12L new / ₹5L old)
5. Add 4% cess on final tax amount