Income Tax Saving: The government has fixed the exemption limit up to Rs 7 lakh under the new tax regime, whereas under the old tax regime, exemption has been given on annual income up to Rs 5 lakh.
Income Tax Saving: Often people invest at the last moment to save tax, due to which they are not able to save much tax. But if tax saving is planned at the beginning of the financial year, then you can save lakhs of rupees. Especially if your annual income is Rs 10 lakh. Here are some methods, under which you can save tax of lakhs of rupees.
The government has fixed the limit of tax exemption up to Rs 7 lakh under the new tax regime, while exemption has been given on annual income up to Rs 5 lakh under the old tax regime. In such a situation, if your income is more than these two tax regimes, then you will have to adopt some methods to save tax. Let us know how not to have to pay a single rupee tax on an income of Rs 10 lakh?
How much tax is levied on an income of Rs 10 lakh?
To save tax on an annual income of Rs 10 lakh, you will have to choose the option of the old tax regime. Different tax slabs are available under the old tax system. Under the old tax regime, the Income Tax Rule says that no tax will have to be paid on income up to Rs 2.5 lakh annually. There is a provision of 5% tax on income of Rs 2.5-5 lakh. Whereas 20% tax is levied on annual income of Rs 5-10 lakh. At the same time, there is a 30% tax slab on annual income of Rs 10 lakh and above.
You will not have to pay even a single rupee tax
If your annual income is Rs 10 lakh, then you will have to pay 30 percent tax. However, if you want, you will not have to pay even a single rupee. You can save the entire amount of tax by taking advantage of some investments and deductions.
How can you save tax on 10 lakh income?
- A rebate of up to 50 thousand rupees is available as standard deduction. In such a situation, now tax will be levied on Rs 9.50 lakh.
- By investing in schemes like PPF, EPF, ELSS, NSC, you can save tax of Rs 1.5 lakh under section 80C of Income Tax. Now tax will have to be paid on Rs 8 lakh.
- If you invest up to Rs 50,000 annually in National Pension System (NPS), then under section 80CCD (1B) you are given an extra tax exemption of Rs 50,000. Now if you deduct another 50 thousand rupees, tax will be levied on Rs 7.50 lakh.
- If you have also taken a home loan, then you can save up to Rs 2 lakh on its interest under section 24B of Income Tax. If you subtract 2 lakhs from 7.50 lakhs, the total taxable income will be 5.50 lakhs.
- You can save up to 25 thousand rupees in tax by taking a medical policy under section 80D of income tax. This health insurance should have your name, your wife’s name and your children’s name. Apart from this, you can get an extra exemption of up to 50,000 rupees by buying health insurance in the name of your parents.
- In such a situation, if you subtract 75 thousand from 5.50 lakhs, the total tax liability will be 4.75 lakhs, which will be below the old tax regime limit of 5 lakh rupees. This means that you will not have to pay a single rupee tax on an annual income of 10 lakhs.
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