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New Tax Regime: Rs 11 Lakh Income is Tax-Free!
22 Nov
Summary
- New tax regime allows Rs 11 lakh income to be tax-free.
- Section 87A rebate applies for incomes up to Rs 12 lakh.
- Some banks offer fixed deposit rates as high as 7.4%.
For the fiscal year 2025-26, the new tax regime presents a significant advantage for individuals with an income of Rs 11 lakh, making it entirely tax-free. This benefit is facilitated by the Section 87A tax rebate, which is applicable to incomes up to Rs 12 lakh. This provision ensures that taxpayers within this income bracket do not incur any income tax liability under the new system.
Furthermore, prospective investors can explore fixed deposit options where certain banks are offering competitive interest rates. Specifically, some small finance banks are providing rates up to 7.4% for general citizens on a one-year tenure for deposits up to Rs 3 crore. Banks like Suryoday Small Finance Bank, Jana Small Finance Bank, and Ujjivan Small Finance Bank are among those offering rates of 7.4% and 7.25% respectively.
It is also possible to avoid Tax Deducted at Source (TDS) by submitting Form 15G, provided certain conditions are met. These conditions relate to the basic exemption limit and the aggregate interest income for the tax year. Experts advise caution with small finance bank FDs, suggesting investment amounts within the DICGC insurance limit of Rs 5 lakh.
