A CTC of ₹15.85 LPA can result in zero income tax under the New Tax Regime (FY 2026-27) by structuring the salary effectively. The calculation includes:
- Annual CTC: ₹15,85,000
- Basic Salary: ₹7,92,500
- Deductions:
- Meal Card Benefit: (-) ₹1,05,600
- Employer’s PF Contribution: (-) ₹95,100
- Standard Deduction: (-) ₹75,000
This leads to a Net Salary of ₹13,09,300. Additionally, with the employer’s NPS contribution applying under section 80CCD(2) (14% of Basic) at (-) ₹1,10,950, the Taxable Income drops to ₹11,98,350. Since this is below ₹12,00,000, a rebate under Section 87A results in zero income tax.
However, this applies only if the salary structure includes deductions like standard deduction, employer’s PF and NPS contributions, and meal benefits. Therefore, it’s crucial to discuss salary components with HR before signing an offer letter to ensure tax efficiency.
UNDER THE NEW TAX REGIME (FY 2026-27)
Here’s how your taxable income can be reduced with eligible salary components.
| PARTICULARS | AMOUNT |
| Annual CTC | ₹15,85,000 |
| Basic Salary (50% of CTC) | ₹7,92,500 |
| Less: Meal Card Benefit (₹200 × 22 working days × 2 meals × 12 months) | (-) ₹1,05,600 |
| Less: Employer’s PF Contribution (12% of Basic Salary) | (-) ₹95,100 |
| Less: Standard Deduction | (-) ₹75,000 |
| Net Salary | ₹13,09,300 |
| Less: Employer’s NPS Contribution u/s 80CCD(2) (14% of Basic Salary) | (-) ₹1,10,950 |
| Taxable Income | ₹11,98,350 |
GOOD NEWS!
Your taxable income is
BELOW ₹12,00,000
RESULT
Your Income Tax
₹0
ZERO TAX!
₹15.85 lakh is NOT a zero-tax limit for everyone.
This is possible only if your salary structure includes:
• Standard Deduction
• Employer’s PF Contribution
• Employer’s NPS Contribution u/s 80CCD(2)
• Meal Card / Food Coupon Benefit • New Tax Regime
Your actual tax depends on your salary structure and employer benefits.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.