Save Tax For Salary 10 Lakhs and Above_Banner-WC


Save Tax For Salary 10 Lakhs and Above_WC

Indian taxpayers are required to pay income tax according to the tax bracket they fall under. As a result, one’s tax liabilities increase with a rise in income. Fortunately, there are several ways to lower your tax obligations as per provisions in the Income Tax laws. If you draw a salary above Rs.10 lakh, tax-saving investments could be the most effective way to reduce your tax burden. Hence, you can consider modifying your tax planning so as to pay zero/nil income tax for Rs.10 lakh earnings.

Income Tax Slabs – Old Income Tax Regime, New Income Tax Regime 2022-23 and New Income Tax Regime 2023-2_WC

Differences in the Income Tax Slabs for Individuals: Old vs New Income Tax Regime

To begin with, taxpayers need to understand the old and new tax structures to know which one they should opt for. A comparison of the old and new income tax slab rates is tabulated below:

Income Per Annum Old Tax Regime New Tax Regime (2022-23)
Up to Rs.2.5 lakh Nil Nil
Rs.2.5 lakh – Rs.5 lakh 5% (full rebate) 5%
Rs.5 lakh – Rs.7.5 lakh 20% + Rs.12,500 10% + Rs.12,500
Rs.7.5 lakh – Rs.10 lakh 20% + Rs.12,500 15% + Rs.37,500
Rs.10 lakh – Rs.12.5 lakh 30% + Rs.1,12,500 20% + Rs.75,000
Rs.12.5 lakh – Rs.15 lakh 30% + Rs.1,12,500 25% + Rs.1,12,500
Above Rs.15 lakh 30% + Rs.1,12,500 30% + Rs.1,87,500

Further, in the budget 2023, the Finance Minister introduced revised income tax slabs, raising the basic income exemption limit to Rs.3 lakh from Rs.2.5 lakh in the new tax regime. Additionally, the government has increased the rebate eligibility ceiling via Section 87A in the new tax regime, from Rs.5 lakh to Rs.7 lakh taxable income. As a result, individuals choosing the new tax regime in FY 2023-24 will not have to pay any taxes, given that their taxable income does not surpass Rs.7 lakh.

Income tax slabs (In Rs) New Tax Regime 2023-24
Between 0 and 3,00,000 0
Between 3,00,001 and 6,00,000 5%
Between 6,00,001 and 9,00,000 10%
Between 9,00,001 and 12,00,000 15%
Between 12,00,001 and 15,00,000 20%
Above 15,00,001 30%

It must also be noted that most of the deductions apply to the old tax regime. Under the new tax regime, you may have to forego the deductions.

How To Save Tax For Salary Above Rs.10 Lakhs Per The Old Tax Regime_WC

How To Save Tax For Salary Above Rs.10 Lakh

If your salary is above Rs.10 lakhs and you want to save taxes in the old tax regime, here are some ways to do so:

Understand Your Salary Structure

Your salary comprises various tax-exempt allowances. So, the remaining portion of the salary is your taxable income.


Salary minus exemptions = Taxable salary income

Taxable salary income minus deductions = Net taxable income

Therefore, taxpayers can maximise their tax savings through exemptions and deductions.

Salary Exemptions Permitted Under Income Tax_WC

Salary Exemptions Permitted Under Income Tax

Your salary structure contains multiple elements that may qualify for tax exemptions as shown in the table here:

Constituents of Salary Taxation Impact
Basic pay Fully taxable
Dearness allowance Fully taxable
House Rent Allowance (HRA) Exempt to a limit
Leave Travel Allowance (LTA) Travel ticket costs exempt for 2 trips in 4 years under Section 10 (5)
Reimbursement of mobile/internet bills Exemption allowed if used for office purposes; bills to be submitted as proof for claiming exemption
Children’s education and hostel allowance Rs. 4,800 per child; maximum 2 children
Food allowance Rs. 50 per meal; 2 meals a day
Standard deduction Rs. 50,000 given to everyone without restrictions
Professional tax Rs. 2,400; varies with each state

Salary Deduction Allowed Under Income Tax_WC

Salary Deduction Allowed Under Income Tax

In case of Rs. 10 lakh income and above, you can optimise tax savings through expenditures to enhance your deductions as follows:

Expenses Tax Considerations
Policy premium of your health insurance under Section 80 D Rs. 25,000 deductions for self, spouse and dependent children; Rs. 25,000 for parents; Rs. 50,000 for senior citizen parents aged 60 years and above
Education loan under Section 80 E Interest deduction for 8 years from year of loan repayment for higher studies of self, spouse, dependent children or student over whom you have legal guardianship
Charity donations under Section 80 G 50% to 100% of the eligible sum
Investments made in tax savings instruments under Section 80 C Tax benefit of Rs. 1.5 lakh each year through investments such as:
  • Employees Provident Fund (EPF)
  • Public Provident Fund (PPF)
  • Equity Linked Savings Scheme (ELSS)
  • Home loan repayment and stamp duty
  • Sukanya Samriddhi Yojana (SSY)
  • National Savings Certificate (NSC)
  • Fixed deposits for 5 years, etc.
Treatment costs for disabled dependents under Section 80 DD In case you bear medical expenses for disabled dependents, expect tax relief as follows: For 40% disability: Rs. 75,000; 80% disability: Rs. 1,25,000
Deductions for home loan repayments Up to Rs. 1.5 lakh u/s 80 C on the principal amount; up to Rs. 2 lakh u/s 24 (b) on the interest component
Life insurance policy maturity amount Maturity sum is tax exempt if the assured amount is 20% for policies issued before April 2012; 10% for policies issued after April 2012; 15% for policies issued after April 2013 for persons with disability or disease

How to Pay Zero Tax on Rs. 10 Lakh Income_WC

How to Pay Zero Tax on Rs. 10 Lakh Income

Let us use an example here: A person receives a salary of Rs. 10 lakh and incurs Rs. 20,000 as interest income. S/he can save tax on Rs. 10 lakh income and arrive at zero income tax through deductions and exemptions such as:

How Much Tax Should I Pay for Rs.10 Lakh?

Income Amount
Income from salary Rs. 10 lakh
Interest income Rs. 20,000
1. Total taxable income Rs. 10,20,000
Standard deduction Rs. 50,000
Investments under Section 80 C Rs. 1.5 lakh
Contribution to NPS under Section 80 CCD (1b) Rs. 50,000
Home loan interest or HRA Rs. 2 lakh
Medical insurance for family Rs. 25,000
Medical insurance for senior citizen parents Rs. 50,000
2. Total deduction claimed Rs. 5,25,000
Net taxable income = total taxable income – total deduction claimed Rs. 10,20,000 – Rs. 5,25,000 = Rs.4,95,000
Tax payable Nil

  • First, there is a standard deduction of Rs. 50,000 for salaried individuals which will decrease the taxable income to Rs. 9.7 lakh.
  • Tax-saving investments under Section 80 C can further lower your taxable income up to Rs. 1.5 lakh or more depending on your financial portfolio. One may reduce another Rs. 50,000 by investing in National Pension Service (NPS) under Section 80 CCD (1b). Together these deductions will decrease the taxable figure to Rs. 7.7 lakh.
  • If you avail of a home loan, the home loan tax benefits take away a huge portion of the taxable income. You may also claim exemptions for HRA if you live on rent. When you avail of either benefit, you can bring down your taxable income by Rs. 2 lakh, taking the net taxable income to Rs. 5.7 lakh.
  • Individuals 60 years and lower can claim deductions up to Rs. 25,000 towards health insurance premium. They may further avail of deductions up to Rs. 50,000 as health insurance payments for senior citizen parents. If one claims both, the taxable income falls to Rs. 4.95 lakh.

A taxable income below Rs. 5 lakh makes you eligible for complete tax rebate under Section 87 A. This essentially implies no/nil tax is payable on a tax slab for Rs.10 lakh and above salary scale.

Save Tax For Salary 10 Lakhs and Above_RAC_WC

Save Tax For Salary 10 Lakhs and Above_PAC _WC

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