Taxpayers are always on a lookout for options which will help them save income tax. Under the Old Tax Regime, tax slab for Rs 10 lakhs is levied with 15 per cent tax rate which can be cut down to zero, according to experts.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Also Read: Budget 2023: Why agri stocks are in focus prior to Budget

There are various deductions provided by the government that can be applied to save tax– While exemptions are part of one's salary, like the House Rent Allowance (HRA) and Leave Travel Allowance (LTA), the biggest section for deduction is Section 80C which allows certain expenditures and investments to be exempt from tax, through this one can bring down their taxable income by Rs.1.5o lakhs.

Apart from this, there are several other sections available to claim deductions ranging from interest on loans (home and education) to premium on health insurance.

Also Read: Budget 2023: Experts eye big push for infrastructure sector from government

How to pay zero tax on a Rs 10 lakh salary?

According to tax expert Gauri Chadha, if a person is earning Rs 10 lakhs per annum, then under the Old Tax Regime, he can land up paying zero income tax.

According to Archit Gupta, Founder and CEO, Clear, theoretically, it is possible to pay zero tax on an income of Rs 10 lakhs. Even if the salary is Rs 12 lakhs, tax payable can be brought down to zero.

However, he cautioned that those with annual income up to Rs 10 lakhs may find it difficult to generate cash flows to fund all the investing strategies.

Putting things into perspective, Archit Gupta gave the following example:

Salary Earning (value in Rs) 10,00,000.00 12,00,000.00
Name of deductions are listed below (value in Rs)    
Std Deduction - Given By Default to all salaried employees (value in Rs) -50,000.00 -50,000.00
Home Loan interest on self occupied property under section 24(b) Max Dedn - Rs 2,00,000.00 (value in Rs) -2,00,000.00 -2,00,000.00
80C - Max deduction of 1,50,000 (value in Rs) -1,50,000.00 -1,50,000.00
80D - Medical Insurance for Self 25,000 + Medical Insurance for parents 25,000 (Non Sr Citizen) (value in Rs) -50,000.00 -50,000.00
80CCD(1B) - Contribution to NPS by self - Max Deduction Rs 50,000 (value in Rs) -50,000.00 -50,000.00
80EEB - (Interest on loan paid to acquire electric vehicle) - Max Deduction Rs 1,50,000 (value in Rs) - -1,50,000.00
80CCD(2) - Employer contribution to NPS Max 10% of basic salary (value in Rs) - -50,000.00
Taxable Income (value in Rs) 5,00,000.00 5,00,000.00
Tax on the income (value in Rs) 12,500.00 12,500.00
Less : 87A rebate (value in Rs) -12,500.00 -12,500.00
Tax payable NIL NIL

Click here to get more stock market updates I Zee Business Live