Calculate Your Income Tax Above 15 Lakh for FY 2022-23

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 2022-23, 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.

Read More: Tax saving investments with tax exempted return benefit for 2023

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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

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.

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

• Term Insurance
• Life Insurance

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

• Sukanya Samriddhi Yojana (SSY)
• Children Insurance Plans

Wealth Protection Investment Plans 

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

Also Read: Income Tax Saving: How Section 80C Of The Income Tax Act Works

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.

Know More: Old vs New Income Tax Slab

Tax Deduction on INR 15 Lakh Annual Income

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

More Deductions

Also, you may claim the below deductions in addition:

To Sum Up

As discussed above, there are numerous ways to calculate your income tax on salary above 15 lakh for FY 2022-23. You can use many tax saving products and instruments to save tax as per the tax calculator old regime. However, you may note that the tax policies of the government keep changing frequently. Hence, it is important to stay updated with the latest in the income tax section at the time of tax planning.

Further, a taxpayer can use the new tax regime calculator to find out his/her taxable income and the tax they would be paying on their income.

Know more:

• Old Tax Regimen Slabs

Other Investment Products