How to Save Tax on ₹20 Lakh Salary: Old vs New Regime & Exemption Strategies
Detailed tax breakdown for ₹20 Lakh CTC. Discover how Corporate NPS under Section 80CCD(2) provides additional tax savings in both regimes.
Tax Calculation on ₹20 Lakh Salary (FY 2026-27)
Earning ₹20 LPA puts you in the higher tax brackets. Choosing the right regime and leveraging corporate allowances can save upwards of ₹80,000 annually.
1. New Tax Regime Calculation (₹20 Lakh CTC)
- **Gross Income:** ₹20,00,000
- **Less: Standard Deduction:** ₹75,000
- **Taxable Income:** ₹19,25,000
- **Tax Calculation:**
- - Up to ₹4 Lakh: ₹0
- - ₹4L to ₹8L (5%): ₹20,000
- - ₹8L to ₹12L (10%): ₹40,000
- - ₹12L to ₹16L (15%): ₹60,000
- - ₹16L to ₹19.25L (20%): ₹65,000
- **Total Tax + 4% Cess:** **₹1,92,400**
- **Monthly In-Hand Take-Home:** **~₹1,32,000–₹1,36,000**
2. Supercharge Savings with Corporate NPS Section 80CCD(2)
Under Section 80CCD(2), employer contributions to your NPS account (up to 14% of basic salary in central govt, 10% in private sector) are **tax-deductible in BOTH New and Old Tax Regimes**! - For a basic salary of ₹10 Lakh (50% of 20 LPA), employer NPS contribution of 10% = **₹1,00,000**. - In the 20% slab, this directly saves **₹20,800** in tax!
Related Calculators & Tools
Frequently Asked Questions
Is Section 80CCD(2) NPS allowed in the New Tax Regime?
Yes! Employer NPS contribution under Section 80CCD(2) is one of the few deductions explicitly allowed under the New Tax Regime.