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Personal Finance News

Tax calculation: If I make ₹10 lakh salary and ₹3 lakh LTCG, how much tax will I pay in FY26 in new regime?

rajeev kumar
By Rajeev Kumar

3 min read | Updated on March 17, 2025, 12:43 IST

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SUMMARY

The income-tax rates under the new tax regime will change from April 1, 2025. Income up to ₹12 lakh will attract zero tax under the new regime. However, capital gains will be taxed separately.

income tax calculation under new regime 2025

New tax rates will apply under the new regime in FY 2025-26. | Image source: Shutterstock

Question: If I make ₹10 lakh from salary and ₹3 lakh long-term capital gains from selling mutual fund units next year, what will be my tax liability in FY 2025-26?
Answer by CA Dr Suresh Surana

For a taxpayer earning ₹10 lakh from salary and ₹3 lakh from long-term capital gains (LTCG) from equity mutual fund units in the next financial year (FY 2025-26), the tax liability under the new tax regime is computed as follows:

Tax calculation

Salary income

Under the new tax regime, a rebate under Section 87A is available if the taxable income is below ₹12 lakh. After applying the standard deduction, the taxable salary income is ₹9,25,000.

LTCG from equity mutual funds

LTCG exceeding ₹1.25 lakh is subject to a 12.5% tax rate. With the total LTCG of ₹3 lakh, the taxable portion after the exemption of ₹1.25 lakh is ₹1.75 lakh. This amount is taxed at 12.5%, resulting in a tax liability of ₹21,875.

Rebate u/s 87A

The total income of ₹11,00,000 (₹9,25,000 plus ₹1,75,000) qualifies for the rebate u/s 87A effectively reducing the tax liability on salary income to zero. However, it is pertinent to note that Section 87A rebate does not apply to income taxed at special rates under Sections 112A, 111A, such as capital gains.

Thus, the total tax liability for FY 2025-26 under the new tax regime amounts to ₹22,750 (₹21,875 plus ₹875 education cess).

ParticularsAmount (₹)
Gross salary10,00,000
Less: Standard deduction u/s 16(75,000)
Net taxable salary9,25,000
Long term capital gains from mutual funds3,00,000
Less: Exemption u/s 112A(1,25,000)
Capital gains chargeable to tax1,75,000
Tax on salary income32,500
Tax on capital gains @ 12.5%*21,875
Total basic tax liability54,375
Less: Rebate u/s 87A(32,500)
Tax basic tax liability (after rebate)21,875
Add: Education cess @ 4%875
Total tax liability22,750
Note: If the long term capital gains have been derived before July 23, 2024, a tax rate of 10% would be applicable instead of 12.5%. In this case, we have assumed that the LTCG has been derived after July 23, 2024.
Have queries related to income tax and personal finance? We will have them answered by experts. Write to rajeev.kumar@rksv.in
Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. The above Q&A is only for informational purposes and should not be considered investment advice from Upstox.
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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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