Pension Income up to Rs.1,66,250 per month equal to Zero Tax

Zero tax is payable due to:

• Standard Deduction = Rs. 75,000
• Rebate u/s 87A (even though filing ITR becomes mandatory if income crosses Rs.4 lakh but up to Rs.12 lakh annually).

Calculation

If pensioner receives: Rs.1,06,250 monthly, then yearly pension:
Rs.1,06,250 × 12 = Rs.12,75,000

Standard deduction = Rs.75,000. So taxable income becomes:
Rs.12,75,000 – Rs.75,000 = Rs.12,00,000

Under the new regime (AY 2026-27): 

If taxable income is up to Rs.12,00,000 → full rebate Rs.60,000 is applicable.

That means pension up to Rs.1,06,250 per month = Zero Tax