Calculate Your Income Tax Above 15 Lakh for FY 2024-25

Individuals earning high-income above 15 lakh do tax planning on their salary to lower the income tax burden on their taxable income. Let us consider ways to compute income tax above 15 lakh for FY 2024-25, in this post
 

India’s Income Tax Act of 1961 allows multiple options to taxpayers for claiming deductions on income tax and lowering the tax liability. Here we are considering how to calculate and save income tax on annual salary above INR 15 lakh. The most important thing to consider in this regard is the income tax slab rates to identify the slab that is applied in your case.

About Income Tax Slab Rates

Taxpayers pay income tax on their annual income as per the tax slab rates proposed by the government. At present, a taxpayer has the option of choosing between two tax slabs – the old and new income tax slab rates – since 2020. The two tax slab rates offered by the government present different approaches to the taxpayers to choose from.

On one hand, you have the old tax structure that continues to offer tax deductions and exemption. And on the other hand, there is the tax calculator new regime that allows lower tax slab rates without many deductions and exemptions at the time of computing tax liability.

Tax Slab Structure: Old Vs. New

Old Income Tax Slab       New Income Tax Slab
 
 
Income     Tax Slab Rate (%)     Income     Tax Slab Rate (%)
 
Up to INR 2.5 Lakh     Nil     Up to INR 2.5 Lakh     Nil
 
INR 2.5 to INR 5 Lakh     5%     INR 2.5 to INR 5 Lakh     5%
 
INR 5 to INR 10 Lakh     20%     INR 5 to INR 7.5 Lakh     10%
 
Above INR 10 Lakh     30%     INR 7.5 to INR 10 Lakh     15%
 
    INR 10 to INR 12.5 Lakh     20%
 
    INR 12.5 to INR 15 Lakh     25%
 
    Above INR 15 lakh     30%
 

 

Additionally, 4% Cess and Surcharge (as applicable) is also required to be paid by the taxpayer.

Here are some points regarding the Tax Slab Rates – (including New and Old tax slabs)

  • 5% is the minimum tax rate applied to a taxpayer, whereas 30% is the maximum in both tax regimes
  • The taxpayer can choose between the old vs. the new tax slab to file tax for ITR calculator and to pay income tax
  • There are three slabs in the old tax structure, whereas the new regime tax calculator comprises of six income tax slabs
  • The new tax structure allow greater flexibility in terms of reducing tax liability
  • However, the income tax calculator new regime do not allow any deductions or exemptions, which you enjoy in the old tax slab rates

Let us consider the taxable amount in your income as per the income tax slab structure.

Old Income Tax Slab 

Tax Slab Rate

Old Income Tax Slab

Tax Amount

New Income Tax Slab

Tax Slab Rate

New Income Tax Slab

Tax Amount

5%     12500     5% + 10%     12500+25000
 
20%     100000     15% +20%     37500+50000
 
30%     135000     25% + 30%     62500+0
 
Tax     247500     Tax     187500
 
Cess @4%     9900     Cess @4%     7500
 
Tax Liability     257400     Tax Liability     195000
 

Let us now consider some tax saving options for individuals with annual salary above INR 15 lakh

Tax Saving Avenues For INR 15 Lakh And Above

As the income of individuals grows up, so do their tax liabilities. However, there are various options to lower the tax liabilities on salaries by means of various exemptions and deductions as per  the Income Tax Act of 1961, India.

Hence, the tax saving products are much in demand among taxpayers. They not just help you save tax, but secure your financial future as well. Here are some options which can be used to reduce tax liability of people with income above INR 15 lakh.

A taxpayer can save up to INR 1.5 lakh on his/her taxable income under various Income Tax sections like 80C, 80CCC, and 80CCD. Below is a list of some such tax saving instruments:

Investment Plans to Protect Your Family’s Finances in your Absence

Investment Plans To Fulfill your Long-Term Objectives

  • Public Provident Fund (PPF)
  • Employee Provident fund (EPF)
  • Unit Linked Insurance Plans (ULIP)
  • Pension or Annuity Plans
  • National Pension Scheme (NPS)
  • Senior Citizen’s Savings Scheme (SCSS)
  • Investment in Real Estate

Child Investment Plans

Wealth Protection Investment Plans 

  • National Savings Certificate(NSC)
  • Fixed Deposits – 5 Year and above
  • Endowment Plans
  • Money-back plans

Tax Benefit Under Section 80CCD

  • A taxpayer can claim additional deduction of INR 50,000 under section 80CCD via schemes like NPS and APY etc.

Tax Benefit Under Section 24

  • A taxpayer can also save tax up to INR 25, 000 under section 80D on Health Insurance premium for the insured and his/her family (below the age of 60 years)
  • Taxpayers can also claim tax benefits on premiums of health insurance for parents above 60 years and senior citizens of up to INR 50,000.
  • Further, INR 5000 can also be saved under Preventive Health Check-up under each health policy

Tax Benefit under section 80D

  • A taxpayer can claim up to INR 2 lakh under Section 24 on housing loan interest payment.

With all the above tax saving tools, the tax liability can be reduced to a substantial level for a person with INR 15 lakh and above salary.

Tax Deduction on INR 15 Lakh Annual Income

Let us understand income tax above 15 lakh with an example as follows:

Salary (Gross)     INR 15, 00, 000
 
Exemptions      
HRA     INR 1,25,000
 
LTA     INR 20,000
 
Reimbursements     INR 20,000
 
Education (of children)     INR 9,000
 
Standard Deductions     INR 40,000
 
Professional Tax     INR 2,200
 
Taxable Salary     INR 13,03,800
 
Deductions:      
Under 80C     INR 1,50,000
 
Under 80D     INR 50,000
 
Under 80E INR 25,000
 
Income for Net Tax      INR 10,78,800
 
Taxable Amount      INR 1.36, 140
 
Rebate Under Section 87A     Nil
 
Total Tax     1,36,140 + Cess 4%
 

More Deductions

Also, you may claim the below deductions in addition:

Home loan deduction (Interest amount) Under section 24(b)     INR 2,00, 000
 
Home loan under section 80EEA     INR 1,50,000
 
Savings in NPS Under section 80CCD(1B)     INR 50,000
 

 

To Sum Up

Income Tax Above 15 Lakh

Yes, switching between income tax slab structures is possible and it can be done on a yearly basis as per the need of the taxpayer.

Yes, your employer is responsible for TDS application on salary and can apply the applicable rates upon your intimation. Hence, it is important to intimate them.

If you use the tax saving instruments wisely, you can pay the minimum amount on your 15 lakh salary package. Refer to the article above to get a better idea.   

For INR 15 lakh and above salaries you can reduce the taxable income by applying various tax saving instruments. Some of them include:   
Unit Linked Insurance Plans (ULIPs)
Pension or Annuity Plans from Life Insurance Companies
Public Provident Fund (PPF)
Employee Provident Fund (EPF)
Pension Schemes 
Senior Citizen Savings Schemes

Yes, if you are a taxpayer with a salaried income, you can change the income tax regime at the time of filing a revised ITR.

 

Author Bio

Paybima Team

Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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