Income Tax On ₹50 Lakh Salary

Income Tax On ₹50 Lakh Salary

A clear guide to income tax on a ₹50 lakh salary, covering deductions, exemptions, and savings options for FY 2024–25

Written by : Knowledge Centre Team

2026-01-04

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5 minutes read

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If your salary is 50 Lakh, in the FY 2025-26 new tax regime, after a ₹75,000 standard deduction, you will likely pay about ₹11.6 lakh in tax (including 10% surcharge), but the old regime lets you save ₹3-5 lakh more with simple deductions like insurance and investments. If you are someone looking forward to saving income tax on a 50 lakh salary, here is your perfect guide. 

Key Takeaways

  • The new regime offers zero tax up to four lakh with easy slabs

  • The old regime can help you save more if deductions are over 3 lakh

  • Claiming section 80C deductions for investments like insurance and PPF can be helpful

  • Budget 2025 raised NPS employer contribution limits to improve savings

  • The Income Tax portal calculator can help pick the best regime as per your specific needs

Budget 2025 Update on Income Tax

The Union Budget 2025 brought significant relief for salaried individuals by simplifying and reducing tax slabs, particularly benefiting those earning around ₹50 lakh annually. Key changes make filing easier while reducing the overall tax burden for middle-income groups.​

  • Tax-free income now ranges from nil to ₹4 lakh, up from the previous ₹3 lakh limit, giving everyone more take-home pay immediately.

  • Full rebate under Section 87A means zero tax liability even on incomes up to ₹12 lakh; salaried employees get this extended to ₹12.75 lakh after standard deduction.

  • New slabs are applied incrementally, 5% on ₹4-8 lakh, 10% on ₹8-12 lakh, then 15% up to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh, and 30% above that, making the system much fairer than before.

  • Employer NPS contributions are now deductible up to 14% of salary (from the previous 10%), boosting retirement savings on a tax-free basis.

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Tax Calculation Example: New Regime

For a ₹50 lakh salary under the new regime for FY 2025-26, here's the step-by-step breakdown after the ₹75,000 standard deduction.​

New Regime Liability:

  • Taxable income: ₹49,25,000 
  • Base tax across slabs: ₹10,57,500 
  • 10% surcharge (50L-1Cr slab): ₹1,05,750
  • 4% cess: ₹46,530
  • Total tax: ₹12,09,780

Switching regimes or adding deductions can significantly reduce this.

trivia-img

Did You Know?

For AY 2024-25, around 72% of all income tax returns filed opted for the new tax regime

 

Source: CBDT

Term Plan

Tax Calculation Example: Old Regime

Switching to the old regime for a ₹50 lakh salary with basic deductions (₹50,000 standard + ₹1.5 lakh 80C) yields this breakdown.​

Old Regime Liability:

  • Taxable income: ₹48 lakh
  • Base tax across slabs: ₹12,52,500
  • 10% surcharge: ₹1,25,250
  • 4% cess: ₹55,110
  • Total tax: ₹14,32,860 (Higher without more deductions)

Add further claims like 80D/NPS to drop below the new regime's ₹12.1 lakh.

How to Save Tax on Salary Above 50L?

The following approach works best if your total eligible investments and expenses exceed the benefits under the new regime.

  • Section 80C Investments: Invest up to ₹1.5 lakh in ELSS, PPF, or life insurance premiums for deduction. This directly reduces taxable salary, saving about ₹46,800 at a 30%+ surcharge rate.​
  • Section 80D Health Cover: Claim up to ₹25,000 for health insurance (₹50,000 for seniors) alongside life cover. This strategy pairs well with 80C for comprehensive family protection and tax relief.​
  • NPS under 80CCD(1B): Add ₹50,000 beyond 80C to the NPS retirement corpus. Employer contributions up to 14% salary also qualify in the new regime.

Conclusion

If your deductions total ₹3-4 lakh or more, choosing the old tax regime to save big when it comes to income tax on 50 lakh salary. It lowers your ₹50 lakh income below the 30% tax bracket (starting at ₹10 lakh), reducing your tax bill by ₹3-5 lakh compared with the new regime. You may as well try the Income Tax portal's calculator for your exact tax on salary.

Glossary

  1. Cess: A fixed tax added to your income tax for specific national needs like health or education
  2. Section 87A: A rebate that reduces making tax zero up to ₹12L (new regime)/₹5L (old) for residents
  3. Section 80C: A deduction of up to ₹1.5L that lowers taxable income through investments like ELSS, PPF, life insurance, and more
  4. NPS: National Pension Scheme, a voluntary retirement scheme offering tax benefits and market-linked growth for long-term savings
  5. Surcharge Rate: An extra tax on high-income individuals when income crosses specified taxable thresholds
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Uncertain About Insurance

FAQs

Under current slabs for FY 2025-26, a ₹50 lakh salary incurs about ₹12.1 lakh tax in new regime (after ₹75K std deduction, slabs, 10% surcharge, 4% cess); old regime starts higher at about ₹14.3 lakh with basic ₹2L deductions but drops below ₹12L with more claims like 80C/80D, deductions apply only in old regime.

The old regime works better if deductions exceed ₹3-4 lakh (80C ₹1.5L, 80D ₹25K, 80CCD ₹50K, HRA), saving ₹2-3 lakh compared with the new regime's ₹12.1 lakh tax liability. The new regime suits minimal deductions with simpler slabs.

Under the old regime, you can claim 80C (₹1.5L investments), 80D (₹25K health), 80CCD(1B) (₹50K NPS), HRA, home loan interest (₹2L), and LTA. New regime limits the standard deduction (₹75K) and employer NPS (14% salary).

Yes. Surcharge applies when total income exceeds ₹50 lakh. For a ₹50 lakh salary, a 10% surcharge is levied on the tax amount (₹50L-1Cr band).

Maximum reduction would include 80C (₹1.5L investments), 80D (₹25K health), 80CCD(1B) (₹50K NPS), HRA, and home loan interest under the old regime. Use the Income Tax calculator to pick the best regime.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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