Earn Under ₹12.75L? You May Still Owe Tax
The 2025 Budget made income up to ₹12 lakh tax-free for salaried people. But if you also earn from FD interest, rent, or freelance work, that extra income adds up — and you may still owe tax when filing your ITR.
Even ₹8,000/month in FD interest can push you into a tax-paying bracket — that's less than a Netflix + Swiggy habit.
Your salary may be tax-free, but extra income can still trigger a tax bill
Key Takeaways
Add up ALL income: pull your Form 26AS and AIS from the income tax portal to see interest, rent, and any other credits reported against your PAN.
Calculate your actual total income by combining salary with FD interest, savings interest, rent, and any freelance or side income before assuming you owe nothing.
File your ITR even if tax liability is small — unpaid tax plus interest under Section 234B and 234C can add 1–1.5% per month to what you owe.
The 2025 Budget made income up to ₹12 lakh tax-free for salaried people. But if you also earn from FD interest, rent, or freelance work, that extra income adds up — and you may still owe tax when filing your ITR.
Here's what happened: Budget 2025 raised the rebate limit so salaried individuals with income up to ₹12.75 lakh pay zero tax — but this only applies to salary income under the new regime.. Income from other sources — bank FD interest, savings account interest, rental income, or freelance payments — is added on top of your salary and taxed separately.. Zero TDS deducted by your employer does NOT mean zero tax liability; you must calculate total income from all sources before filing your ITR..
What you should do: Add up ALL income: pull your Form 26AS and AIS from the income tax portal to see interest, rent, and any other credits reported against your PAN.. Calculate your actual total income by combining salary with FD interest, savings interest, rent, and any freelance or side income before assuming you owe nothing.. File your ITR even if tax liability is small — unpaid tax plus interest under Section 234B and 234C can add 1–1.5% per month to what you owe..
Pro tip: Banks deduct TDS at 10% on FD interest above ₹40,000 — but if your total tax rate is higher, you still owe the difference when you file ITR.
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- [1]“Earning under ₹12 lakh? Here's why you may still have to pay income tax” Personal Finance News in CNBCTV18, Personal Finance Latest News, Personal Finance News · 6 Jul 2026
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