Most salaried individuals end up paying more taxes simply because they don’t plan right. It’s frustrating to see your hard-earned money disappear, especially when there’s a smarter, legal way to avoid it. Believe it or not, you can bring your tax liability down to zero without breaking any laws or hunting for loopholes with the new tax regime.

With smarter, better planning, salaried taxpayers earning as much as ₹19.2 lakh annually can pay nothing in income tax. And no, it's not a hack or a loophole; it's simply knowing how the new tax regime operates and taking advantage of it. This post will discuss everything you need to know!

Why the New Tax Regime Is Better than the Old Tax Regime?

The new tax regime is less complicated and has fewer slabs than the old one. It's especially attractive if you don't depend too much on all those exemptions like HRA, LTA, or 80C deductions. It's a no-frills policy that can benefit you greatly if you know where to find it.

And in the new tax regime, income up to ₹12 lakh can have no tax liability. With progressive slabs and some clever deductions, even such larger incomes can be driven into that lovely tax-free zone.

The best part? You don't need to calculate your tax manually. Try an income tax calculator to run through various scenarios and determine what works best for your income situation.

Can You Really Pay Zero Tax on ₹19.2 Lakh Salary?

Now, how exactly does someone with a salary of ₹19,20,000 end up paying no tax? Here's how:

Step 1: Standard Deduction – ₹75,000

The new regime provides a flat ₹75,000 standard deduction by the government. Thus, your taxable income is now:

• ₹19,20,000 - ₹75,000 = ₹18,45,000

Step 2: NPS Contribution – ₹84,000

If you're contributing to the NPS, you can claim up to 14% of your basic salary. That's an extra:

• ₹18,45,000 - ₹84,000 = ₹17,61,000

Once you've calculated your net taxable income in the new tax regime, you'll have a final answer. Not only is this a deduction, but you're also building your retirement savings. Win-win!

Step 3: Tax-Free Salary Components – ₹6,23,600

Your salary likely includes various flexi-pay elements like conveyance, entertainment allowance, and uniform allowance—these are tax-free under the new regime. Subtracting this gives:

• ₹17,61,000 - ₹6,23,600 = ₹11,37,400

These are totally legit, government-approved exemptions that often get overlooked.

Step 4: Home Loan Interest & Rental Income Set-Off – ₹2,60,000

If you have borrowed a home loan, you can deduct interest of ₹2 lakh. You can deduct another ₹60,000 if you are earning rent on that property and adjusting it under income from the house property. Now, your taxable income is as follows:

• ₹11,37,400 - ₹2,60,000 = ₹8,77,400

Step 5: Other Deductions – ₹50,000

And don't forget the small but important gift allowances, family pensions, etc. These may add up to about ₹50,000:

• ₹8,77,400 - ₹50,000 = ₹8,27,400

Now, your tax liability has been reduced far below ₹12 lakh.

Step 6: Claiming the Rebate – ₹25,000

In the new tax regime, you receive a tax rebate of ₹25,000 on income up to ₹12 lakh. With your final taxable income being ₹8,27,400, this rebate reduces your tax liability to zero.

And that is how a person earning ₹19.2 lakh can pay zero tax on their income.

So, Who Should Choose the New Regime?

The new regime is best for you if:

• You have hardly any investments under 80C, or do not wish to lock money simply for tax saving.
• You like a more straightforward, less paperwork-intensive process.
• You are given a flexible salary package with a number of tax-free elements.
• You wish to invest in NPS or other schemes under the new rules.

A Quick Word on Planning

While this sounds amazing, remember that this requires thoughtful financial planning. For instance, your salary must include eligible allowances, and you must actively contribute to schemes like NPS. Not everyone will qualify for zero tax automatically. But if your company offers the right salary structure and you're willing to plan ahead, you're golden.

Also, don't forget to keep your documentation in check. Everything from your salary slip to your home loan interest certificate should be handy when filing your return.

And yes, while filing your taxes, ensure that all your details, like your TIN number, are up-to-date. It might seem minor, but these tiny details can save you from big headaches later.

Final Thoughts

The new tax regime is not just about lower rates but smarter money management. Whether you're a salaried employee, a young professional, or someone nearing retirement, understanding how to make the most of these benefits can help you save lakhs. And honestly, who doesn't love a bit of extra cash staying in their account instead of going to taxes?