How to Save Tax on ₹9 Lakh Salary

Old Tax Regime Slabs (Applicable if Opted For)

New Tax Regime Slabs (Default Option)

The New Tax Regime has simplified, uniform slab rates for all individuals, regardless of age.

Income Tax Changes From 1st April 2025

The Union Budget 2025 has introduced some key updates:

• Higher Rebate Under Section 87A: Under Section 87A, taxable income up to ₹12 lakh is eligible for a ₹60,000 rebate, reducing tax liability to zero.
• Standard Deduction: Salaried individuals can claim a ₹75,000 deduction.
• Relaxed TDS Limits: TDS on interest and rent payments has higher exemption limits.
• Simplified Filing: Time to file updated returns has increased from 2 to 4 years.
• New Provisions: Removal of some strict TDS rules and changes for ULIPs and capital gains.

Features of the New Tax Regime (FY 2025—26)

• Default Tax System: The new regime is now the default, but taxpayers can still choose the old regime each year if they want.
• Increased Exemption: The basic exemption limit increased from ₹3 lakh to ₹4 lakh.
• Higher Section 87A Rebate: Taxpayers earning up to ₹12 lakh can pay no tax after rebates.
• Standard Deduction for Salaried: ₹75,000 deduction reduces taxable income.
• Highest Surcharge: Remains at 25% for incomes above ₹2 crore.

Tax Calculation on ₹9 Lakh (New Regime)

The new regime for FY 2025—26 offers simplified slabs, lower rates, and limited deductions. Here's how the tax would apply before any rebates:

Therefore, if you're a salaried individual, the standard deduction of ₹75,000 further boosts your exemption. So, even if your gross salary is ₹9 lakh, your taxable income drops to ₹8.25 lakh. You're still well within the rebate threshold , and you pay no tax under the new regime. You pay zero tax if you're salaried and under ₹12 lakh taxable income.

Smart Tax Saving Strategies (FY 2025—26)

Effective tax planning can significantly lower your liability. Given below are key strategies, grouped by relevance to the new or old tax regime.

• Use Section 87A Rebate
  If your taxable income is within ₹12 lakh, you can claim a rebate of ₹60,000 under Section 87A. This can reduce your tax liability to zero if planned properly. Applicable in the new regime. 
• Claim Standard Deduction (₹75,000)
  Salaried and pensioned individuals automatically receive a ₹75,000 standard deduction under the new regime, which helps lower taxable income without needing to submit proofs. Claim Standard Deduction (₹75,000). Applicable in the new regime.
• Invest Under Section 80C
  You can reduce taxable income by up to ₹1.5 lakh through investments in PPF, ELSS, life insurance, and other eligible instruments—but only if you opt for the old regime.
• Buy Health Insurance (Section 80D)
  A deduction of up to ₹25,000 (₹50,000 for senior citizens) is available for health insurance premiums under Section 80D in the old tax regime.
• Use Employer Benefits (HRA, LTA, Food Coupons)
  Tax exemptions on components like House Rent Allowance (HRA), Leave Travel Allowance (LTA), and meal vouchers are available only under the old regime and can significantly reduce taxable salary.
• Contribute to NPS (Section 80CCD(1B))
  You can claim an extra ₹50,000 deduction for contributions to the National Pension System, but this is available only if you choose the old regime.
You can claim an extra ₹50,000 deduction for contributions to the National Pension System, but this is available only if you choose the old regime.

Key Takeaways for Taxpayers with Salary of ₹9 Lakh

• Taxpayers with ₹9 lakh salary can pay zero tax under both regimes with smart use of Section 87A.
• The new regime is simpler and suitable if you have fewer deductions.
• The old regime is better if you claim significant exemptions and deductions.
• Always compare both regimes before filing your return for maximum benefit.

Conclusion

Effective tax planning can help individuals earning ₹9 lakh effectively reduce their tax liability to zero under the New Tax Regime. The enhanced Section 87A rebate and standard deduction make it ideal for those with minimal deductions. However, the Old Regime may still be beneficial if you claim multiple exemptions. Comparing both options annually ensures optimal tax outcomes.