How You Can Pay Zero Tax on a ₹14.65 Lakh Salary in FY 2026-27

Written by Finnovate

Content Team

Reviewed by CA Jayant Furia

Senior Tax Expert

Updated: July 2026

You've probably seen the number by now: a ₹14.65 lakh salary can be structured to pay zero tax under the new regime. It's true, and the math behind it is simple enough to fit in a graphic.

What most versions of this story leave out is where it stops working, what it depends on, and what to do if your employer doesn't offer half the pieces. That's what this article covers.

How the ₹14.65 Lakh Structure Actually Works

The structure uses three things that already exist in the new regime: the standard deduction, employer EPF, and employer NPS. None of it needs a special filing or a new deduction, only how your CTC is split.

Because ₹11,99,550 stays under ₹12,00,000, the Section 87A rebate wipes out the computed tax entirely, that's the specific rule behind the zero-tax result, not a special exemption tied to this exact structure.

This illustration assumes employer EPF is contributed at 12% of full basic salary (₹87,900 a year here). Employers are only statutorily required to contribute EPF up to a wage ceiling of ₹15,000 a month, just ₹21,600 a year, and contributing beyond that is a voluntary employer policy, not a legal obligation. If your employer restricts PF to this ceiling instead of your full basic, the ₹14.65 lakh zero-tax threshold won't hold. Confirm this with your payroll team before relying on it.

What If Your Employer Doesn't Offer NPS?

A large share of employers don't offer employer NPS at 14%, some don't offer it at all. Without it, the ceiling for zero tax drops, but the structure still works using EPF and the standard deduction alone.

What Happens If Employer Contributions Cross ₹7.5 Lakh?

Does Your Employer Have to Offer This?

No. The structure needs your employer's payroll and NPS plan to actually support ~50% basic salary and NPS contributions up to 14%. Some employers already run compensation this way, many don't, and you generally have to ask for it rather than expect it by default.

Two Perquisite Limits That Changed in FY 2026-27

When to Actually Ask for This

• At onboarding with a new employer: the highest-leverage moment, since the full CTC split is still being decided.
• At your annual appraisal or CTC revision: restructuring an existing package is possible but depends on your employer's payroll flexibility.
• If you're mid-negotiation on a job switch: this is exactly the moment to raise it with the new employer, before the offer is finalized.

FAQs

1. Is the ₹14.65 lakh zero-tax structure available to everyone?

No. It requires your employer's compensation structure to support roughly 50% basic salary and employer NPS contributions up to 14% of basic, on top of standard EPF. Not every employer offers this combination.

2. What happens if my CTC is higher than ₹14.65 lakh?

Zero tax on a higher CTC is possible, but scaling the same percentages can push your combined employer contributions to EPF, NPS, and superannuation past the ₹7,50,000 aggregate annual cap. Past that point, the excess is taxed as a perquisite, so it needs checking against the cap rather than just repeating the same percentages.

3. Does this work under the old tax regime too?

Employer NPS under Section 80CCD(2) is available in the old regime too, but capped at 10% of basic for private-sector employees rather than 14%. Combined with the old regime's lower ₹50,000 standard deduction and the Section 87A rebate applying only up to ₹5,00,000, this specific zero-tax outcome doesn't carry over to the old regime.

4. What if I've already crossed the ₹7.5 lakh employer EPF, NPS, and superannuation cap?

The amount above ₹7,50,000 a year in combined employer contributions is added to your taxable salary as a perquisite, and any interest or growth on that excess is taxed annually as well. It doesn't cancel the benefit on the portion below the cap, it only means the extra employer contribution beyond it stops being tax-free.

5. Can I request this structure after I've already joined a company?

Yes, usually at your annual appraisal or CTC revision, though it depends on whether your employer's payroll and NPS plan support restructuring outside of onboarding. It's a request you make to HR and payroll, not something you can change unilaterally on your own return.

6. What if my CTC is a bit above ₹14.65 lakh, like ₹14.8 lakh or ₹15 lakh?

You won't face a sudden jump in tax. Section 87A includes a marginal relief provision that caps your tax at the amount your taxable income exceeds ₹12,00,000, not the full slab-computed tax. If your taxable income lands at, say, ₹12,10,000, tax is capped at roughly ₹10,400 including cess, rather than the ~₹63,960 the slabs alone would compute. The zero-tax outcome fades gradually just above the threshold, it doesn't fall off a cliff.

Where to Go from Here

Disclaimer: This article is for general information and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any securities or financial instruments. Tax rules, limits, and thresholds referenced here are based on publicly available sources and are applicable for FY 2026-27 (AY 2027-28) unless stated otherwise. Rules may change in subsequent budgets. Past tax outcomes are not indicative of future liability. Please consult a SEBI-registered investment adviser or qualified tax professional before making any tax-related financial decision.