Tax

How To Save Tax On Salary Above Rs 15 Lakh Income

While the old tax regime offers a higher rate of tax, it gives you a lot of options to claim investment-linked and other forms of deductions to help reduce your taxable income. On the other hand, the new tax regime offers lower tax rates with broader slab ranges. However, it gives selective/limited options for claiming deductions

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No tax up to a salaried income of Rs 12 lakh was one of the biggest takeaways from Budget 2025. However, salaried employees with a higher income are still liable to pay income tax. 

Currently, how much tax one can save would majorly depend on the tax regime you choose based on the salary and all other incomes you are earning. 

The Old Tax Regime 

While the old tax regime offers a higher rate of tax, it gives you a lot of options to claim investment-linked and other forms of deductions to help reduce your taxable income. On the other hand, the new tax regime offers lower tax rates with broader slab ranges. However, it gives selective/limited options for claiming deductions. ‘Therefore, one should annually evaluate which regime works better for them basis their income by drawing down a comparative analysis between both.

The old regime allows various deductions such as HRA, LTA, interest on home loans, standard deduction on salary, investment-linked deductions such as contributions to EPF, PPF, ELSS, principal payment on your home loan, tax saving FDs, contribution to NPS, deduction of premium paid on health insurance, donations, deduction for savings bank interest etc.” says Ritika Nayyar, partner, Singhania & Co.

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If you have a home loan, you will get a deduction of Rs 1.5 lakh under section 80C for home loan principal payment and a deduction of up to Rs 2 lakh under section 24B for interest payments. Having a home loan could tilt the favour towards the old tax regime if you are claiming all other deductions, but you need to do the maths. 

The New Tax Regime 

The new regime, however, while giving lower tax benefits, restricts the benefit of deductions to only a few, such as standard deduction on salary, employers’ contribution to NPS, interest on home loan for let out property, conveyance allowance for official purposes, contribution to Agni veer corpus fund, gratuity and leave encashment etc.

Based on your personal financial goals in terms of your income, expenditure, and investment objective, together with a play out with the tax regimes, you may efficiently manage your final tax liability. As it stands now, the new tax regime is likely to be the most beneficial when it comes to savings tax for an income of Rs 15 lakh and above. “Based on your personal financial goals in terms of your income, expenditure, and your investment objectives, together with a review of the tax regimes, you may efficiently manage your final tax liability,” says Nayyar. 

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