Earning ₹20 LPA? 1 Tax Regime Saves ₹1L More
At ₹20 lakh salary, the Section 87A rebate is gone, so your regime choice really matters. The right pick between old and new tax regime can save you over ₹1 lakh — but only if you claim the right deductions.
That ₹1L tax saving = 13 months of your Netflix + Zomato Gold + Spotify bills combined.
Your tax regime choice can save you over this amount annually at ₹20 LPA
Key Takeaways
Calculate your total deductions: add up 80C (₹1.5L), NPS (₹50K), HRA, and home loan interest — if they exceed ₹3.75L, old regime likely wins.
Use the Income Tax Department's free tax calculator at incometax.gov.in to compare your exact liability under both regimes before July 31.
Inform your employer of your chosen regime via Form 12BB before April so TDS is deducted correctly — wrong TDS means a refund hassle later.
At ₹20 lakh salary, the Section 87A rebate is gone, so your regime choice really matters. The right pick between old and new tax regime can save you over ₹1 lakh — but only if you claim the right deductions.
Here's what happened: At ₹20 LPA, the Section 87A rebate (which waives tax up to ₹12.75L income) no longer applies, making regime choice critical.. The new regime offers lower slab rates but zero deductions — no HRA, 80C, 80D, or home loan interest benefits.. The old regime allows deductions up to ₹3.5L+ (80C, NPS, HRA, home loan), which can slash taxable income significantly at this salary..
What you should do: Calculate your total deductions: add up 80C (₹1.5L), NPS (₹50K), HRA, and home loan interest — if they exceed ₹3.75L, old regime likely wins.. Use the Income Tax Department's free tax calculator at incometax.gov.in to compare your exact liability under both regimes before July 31.. Inform your employer of your chosen regime via Form 12BB before April so TDS is deducted correctly — wrong TDS means a refund hassle later..
If you pay rent AND have a home loan in a different city, you can claim both HRA and home loan interest under the old regime — a dual deduction most salaried employees miss entirely.
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- [1]“New vs old regime: Earning ₹20 LPA? Here's which regime saves you over ₹1 lakh” mint - money · 1 Jul 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.