Income Tax Saving: The government has fixed the limit of exemption up to Rs 7 lakh under the New Tax Regime, whereas exemption has been given on annual income up to Rs 5 lakh under the Old Tax Regime.
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 planning is done at the beginning of the financial year itself, then you can save lakhs of rupees. Especially your annual income should be Rs 10 lakh. Here some methods are being explained, under which you can save tax worth 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 you will not have to pay even a single rupee tax on an income of Rs 10 lakh?
How much tax is levied on earnings of Rs 10 lakh?
To save tax on annual income of Rs 10 lakh, you will have to opt for the old tax regime. There are different tax slabs 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 annual income up to Rs 2.5 lakh. There is a provision of 5% tax on income of Rs 2.5-5 lakh. Whereas 20% tax is charged on annual income of Rs 5-10 lakh. 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 of 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 making some investments and taking advantage of deductions.
How can you save tax on Rs 10 lakh income?
A rebate of up to Rs 50 thousand is available as standard deduction. In such a situation, tax will now be charged 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 the National Pension System (NPS), you are given an extra Rs 50,000 tax exemption under Section 80CCD (1B). Now if we subtract Rs 50 thousand more, tax will be charged on Rs 7.50 lakh.
If you have also taken a home loan, you can save up to Rs 2 lakh on its interest under Section 24B of Income Tax. If we subtract Rs 2 lakh more from Rs 7.50 lakh, the total tax income will be Rs 5.50 lakh.
You can save tax up to Rs 25 thousand by taking a medical policy under Section 80D of Income Tax. Your name, your wife and children’s names should be there in this health insurance. Apart from this, if in the name of your parents
You can get additional discount of up to Rs 50,000 by purchasing health insurance.
In such a situation, if you subtract 75 thousand from Rs 5.50 lakh, the total tax liability will be Rs 4.75 lakh, which will be below the old tax regime limit of Rs 5 lakh. This means that you will not have to pay a single rupee tax on annual income of Rs 10 lakh.
