Budget 2023: 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.
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.
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: