Does your wage come below the revenue tax bracket? Are you questioning save the whole tax in your wage? Nicely, there are various methods to avoid wasting revenue tax. Salaries professionals can simply cut back their revenue tax liabilities by making some investments all year long. Nonetheless, most taxpayers seek for methods to avoid wasting taxes when the ITR submitting date approaches.
On this article, we’ll present you the calculations on how one can save tax on a Rs 15 lakh revenue below the brand new tax regime. However earlier than that, let’s know the brand new tax regime slabs for FY 2025-26.
Earnings Tax Slabs Tax Fee
As much as Rs 4,00,000 NIL
Rs 4,00,001 – Rs 8,00,000 5%
Rs 8,00,001 – Rs 12,00,000 10%
Rs 12,00,001 – Rs 16,00,000 15%
Rs 16,00,001 – Rs 20,00,000 20%
Rs 20,00,001 – Rs 24,00,000 25%
Above Rs 24,00,000 30%
Find out how to pay 0 tax on Rs 15,00,000 revenue
Let’s assume the essential wage is 50 per cent of your gross wage, i.e., Rs 7,50,000.
Commonplace deduction
New tax regime: Salaried taxpayers can stand up to Rs 75,000 commonplace deduction on their wage below Part 87A of the Earnings Tax Act, 1961.
After this commonplace deduction, the taxable revenue shall be Rs 15,00,000- Rs 75,000= Rs 14,25,000.
NPS
Below the brand new tax regime for FY 2025-26, a salaried individual can get a tax profit on the employer’s contribution to their Nationwide Pension System (NPS) account. They will take a most advantage of 14 per cent of the essential pay.
In case your fundamental pay is Rs 7,50,000, then the utmost NPS deduction shall be Rs 1,05,000.
Taxable revenue after NPS deduction: Rs 14,25,000- Rs 1,05,000= Rs 13,20,000.
EPF
Now, let’s transfer to the EPF (Worker Provident Fund) profit. A salaried individual can get a tax advantage of as much as 12 per cent of their fundamental pay on the employer’s contribution to their Staff’ Provident Fund (EPF).
On a fundamental pay of Rs 7,50,000, the EPF contribution (12% of fundamental) shall be Rs 90,000.
Taxable revenue after EPF advantages
Rs 13,20,000- Rs 90,000= Rs 12,30,000
PPF, Sukanya Samriddhi Account tax profit
If a taxpayer below the brand new regime invests Rs 1,00,000 within the Sukanya Samriddhi Account and Rs 1,50,000 of their Public Provident Fund (PPF), they may also obtain a tax benefit of Rs 17,500.
After Rs 17,500 tax deduction, the taxable revenue shall be
Rs 12,30,000 -Rs 17,500= Rs 12,12,500.
Rs 1.50 lakh exemption on leisure, cellular payments
The brand new tax regime additionally gives you tax advantages of as much as Rs 1.50 lakh if in case you have paid tax in your leisure, cellular, gas, and transport payments. Nonetheless, these advantages can be found solely when you’ve gotten paid these payments for official functions and you must ask your organization’s human sources (HR) supervisor to make these a part of your gross wage.
Let’s assume your reimbursements are.
Leisure bills- Rs 40,000
Transport allowance- Rs 60,000
Gasoline bills- Rs 25,000
Cellular bills- Rs 10,000
Uniform bills- Rs 15,000
After a Rs 1,50,000 exemption, your taxable revenue is decreased to Rs 12,12,000-Rs 1,50,000= Rs 10,62,000.
Now, your revenue comes below the tax-free bracket of Rs 12,00,000. Therefore, it’s worthwhile to pay 0 tax should you select the brand new tax regime for FY 2025-26.
(Disclaimer: This isn’t funding recommendation. Do your due diligence or seek the advice of an professional for monetary planning.)
