The new regime offers a substantial benefit for FY 2025–2026 since it lowers the tax payment to zero for incomes up to Rs. 12 lakh. So, if you ask me which tax regime is better for 7 lakhs, I will say the new tax regime is far better than the old tax regime. I have shared more reasons below.
Which Tax Regime is Better for 7 LPA?
For a Rs 7 lakh annual income in India, the new tax regime typically offers better tax savings and greater simplicity especially to salaried individuals. Though the old regime can outperform if you have substantial deductions.
Under the new tax regime, you enjoy:
Zero tax up with Rs 7 lakh salary. It is because of the Rs75,000 standard deduction and full rebate under Section 87A.
A simplified slab: 5% on income between Rs 3 to 7 lakh, then 10% beyond.
No need for investment proofs or exemption claims.
By contrast, the old regime taxes Rs 7 lakh as:
Rs 0 to 2.5 lakh: 0%,
Rs 2.5 to 5 lakh: 5%,
Rs 5 to 7 lakh: 20%, totaling around Rs 33,800 in tax before cess.
For incomes up to Rs7 lakh with minimal exemptions, the new regime is almost always superior because of the zero tax and fewer hassles.
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Which Tax Regime is Better for 7 Lakhs?
priya
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5 months
2025-07-13T07:29:31+00:00 2025-07-13T07:29:33+00:00Comment
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