How to Save Tax for Salary Above 10 Lakhs in India
Want to reduce your tax burden? Explore smart ways to save tax on salary above 10 lakhs with sections 80C, 80D, and home loan deductions.
Anjali Singh
Assistant Manager
With the new tax regime under the Budget 2025, there have been several new changes in the financial planning for taxpayers. The new tax regime features 4 lakh slabs with newly introduced tax percentages. If you are an earning individual, understanding the new and old tax regimes is crucial for reducing your tax burden. Especially for people earning above 10 lakhs in salary in India, the taxation rates start to increase. You need to calculate some smart routes to reduce the tax. A good salary backed by an effective financial plan is the way to financial independence in the future.
Are you wondering how to save tax for salary above 10 lakhs? In this guide, we have researched some smart and legal ways you can reduce your tax rates and enjoy savings during this financial year.
Tax Slabs Under The New and Old Tax Regimes
Before we dive into the smart tactics, it is important to refer to the tax slabs and percentages issued by the government.
Tax Slabs Under the Old Regime
|
Income Slab |
Tax Rate |
|
Up to ₹ 2.5 Lakhs |
Nil |
|
₹2,50,001 - ₹5,00,000 |
5% |
|
₹5,00,001 - ₹10,00,000 |
20% |
|
Above 10 Lakhs |
30% |
Deductions and Exemptions
|
Category |
Eligible Deductions |
Key Details & Conditions |
|
Section 80C – Tax-Free Investments |
Up to ₹1,50,000 |
You can claim deductions by investing in: Employees’ Provident Fund (EPF) Public Provident Fund (PPF) Equity Linked Savings Scheme (ELSS) Home loan principal repayment & stamp duty Sukanya Samriddhi Yojana (SSY) National Savings Certificate (NSC) |
|
Section 80D – Medical Insurance |
Up to ₹ 25,000 for self and spouse insurance. Additional, ₹ 25,000 for parents or senior citizens. |
Claim deduction on health insurance premiums paid for yourself and your family members. Helps lower tax liability while ensuring health coverage. |
|
Section 80E – Education Loan Interest |
No upper limit |
Deduction on interest paid towards an education loan for higher studies (self, spouse, or children). Claimable for up to 8 years or until the loan is fully repaid. |
|
HRA – House Rent Allowance |
Depends on salary, rent, and city |
If you live in rented accommodation, you can claim HRA exemption under Section 10(13A) |
Tax Slabs Under the New Regimes
|
Income Slab |
Tax Rate |
|
Up to ₹ 4 Lakhs |
Nil |
|
₹ 4 lakhs - Rs. 8 lakhs |
5% |
|
₹ 8 lakhs - Rs. 12 lakhs |
10% |
|
₹ 12 lakhs - Rs. 16 lakhs |
15% |
|
₹ 16 lakhs - Rs. 20 lakhs |
20% |
|
₹ 20 lakhs - Rs. 24 lakhs |
25% |
|
Above ₹ 24 lakhs |
30% |
Exemptions and Deductions
|
Category |
Deduction |
Key Details |
|
Standard Deduction |
₹75,000 |
Available to all salaried individuals and pensioners; auto-applied. |
|
Section 80CCD(2) |
Up to 10% of salary (14% for govt. employees) |
Employer’s contribution to NPS is tax-free within limits. |
|
EPF |
Tax-free up to ₹2.5 lakh/year |
Interest on contributions within this limit remains tax-exempt. |
|
Gratuity (Sec 10(10)) |
Up to ₹20 lakh |
Tax-free at retirement after 5+ years of service. |
|
VRS (Sec 10(10C)) |
Up to ₹5 lakh |
Exempt once in a lifetime under approved Voluntary Retirement Scheme. |
How to Save Tax For Salary Above 10 Lakhs Salaries?
Whether you are choosing the old or new tax regime, smart planning and techniques are your best friends. Here are some key tips and legal hacks on how to save tax on salary:
Claim Standard Deduction
One of the most popular and simple tools to reduce your tax burden is claiming the standard deduction offered.
- You can avail it against salary income with minimal conditions assigned.
- The old tax regime offers ₹50,000 deductions while the new regime comes with increased ₹75,000 deductions.
Choose The Correct Regime
The new tax regime under Budget 2025 comes with much more streamlined and simple tax slabs. However, unlike the old regime, it features fewer opportunities for deductions and exemptions. This means:
- If you are eligible for various exemptions, the old regime may bring in lower tax cuts and better overall finances.
- However, the new regime offers a faster process with a better standard deduction of ₹75,000.
Claim Exemption on Gifts Received
Gifts received in cash or any other kind are not taxable under Section 56 in the Income Tax Act. However, the value of the gift must be up to ₹ 50,000. If the amount of the gift received exceeds the authorised limit of ₹50,000, then the entire amount is taxable. This smart tax-saving option for 10-lakh salary in India is available in both old and new regimes. You can learn more about this through My Mudra’s blog.
Claim Deductions on Agniveer Corpus Fund
Under Section 80CCH(2), the contributions made to the Agniveer Corpus Fund are available for tax deductions. Only individuals who are enrolled on the Agnipath Scheme of the Central Government are eligible for this deduction. Plus, there is no maximum limit of deduction; you can deduct the entire amount contributed to the fund.
Examples of Tax Calculation for ₹ 10 Lakhs and ₹ 15 Lakhs Salary
Example 1: 10 Lakhs Salary in India
|
Particulars |
Old Regime |
New Regime |
|
Gross Income |
₹10,00,000 |
₹10,00,000 |
|
Section 80C (EPF + ELSS) |
₹1,50,000 |
— |
|
Section 80D (Health Insurance) |
₹25,000 |
— |
|
Standard Deduction |
₹50,000 |
₹75,000 |
|
Taxable Income |
₹7,75,000 |
₹9,25,000 |
|
Approx. Tax Payable (after rebate & cess) |
₹67,500 |
₹51,480 |
Example 2: ₹ 15 Lakhs Salary in India
|
Particulars |
Old Regime |
New Regime |
|
Gross Income |
₹15,00,000 |
₹15,00,000 |
|
Section 80C (Investments) |
₹1,50,000 |
— |
|
Section 80D (Health Insurance – Family + Parents) |
₹50,000 |
— |
|
Section 80CCD(1B) (NPS) |
₹50,000 |
— |
|
Home Loan Interest (Section 24b) |
₹2,00,000 |
— |
|
Standard Deduction |
₹50,000 |
₹75,000 |
|
Taxable Income |
₹10,50,000 |
₹14,25,000 |
|
Approx. Tax Payable (after cess) |
₹1,26,000 |
₹1,42,800 |
Conclusion
With some tips and legal planning, you can enjoy lower tax cuts for your salary above 10 lakhs. Choosing the old or new tax regime is crucial to finding the ideal set-up for your deductions and tax cuts. Out of several tax-saving ways mentioned above the home loan online and education loans repayment interest is a key way to reduce your taxation. And, My Mudra offers a fast and easy loan application process. You can access over 90 reputed banks and NBFCs at your fingertips with an all-online process.
So, apply for the loan on My Mudra today and take your first step towards financial freedom.
Also Read:
- How to Save Tax on Salary Income of 12 Lakhs in India
- Electric Vehicle Loan Tax Benefits in India 2026
Frequently Asked Questions
How much tax do I have to pay if my salary is 10 Lakhs in India?
The total tax amount depends on your deductions and liabilities. Plus, which tax regime you choose will also play a crucial part in the final taxable income.
How can home loans from My Mudra help me reduce my taxes?
Under Sections 80C and 80E, you can avail tax deductions on the interest repayment of the loan amount. You can apply for one online from the comfort of your home.
What range of salary is tax-free under the Income Tax Act?
Under the old regime, an individual earning more than ₹ 2,50,000 is free of any tax cuts. However, with the new regime, anyone above ₹ 3,00,000 is eligible for tax cuts.
Anjali Singh
Assistant Manager
Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.
