Tax season doesn’t have to mean stress. With proper planning, you can reduce your tax liability and still stay fully compliant with the law. Here are smart, legal ways to save tax on your salary in India:
1. Utilize Section 80C Deductions (Limit: Rs. 1.5 Lakhs)
Invest in these to claim deductions:
Employee Provident Fund (EPF)
Public Provident Fund (PPF)
ELSS (Tax-saving mutual funds)
Life Insurance Premiums
Principal repayment of home loan
Children’s tuition fees
2. House Rent Allowance (HRA)
If you live in a rented house and receive HRA, you can claim exemption based on:
Actual HRA received
50% of basic salary (for metro cities), 40% for others
Rent paid minus 10% of salary
Tip: Keep rent receipts and PAN of your landlord if rent exceeds Rs. 1 lakh annually.
3. Standard Deduction (Flat Rs. 50,000)
This is a no-questions-asked deduction available to all salaried individuals. It’s automatically factored into your taxable income
4. Tax-Free Allowances & Reimbursements
Ask your employer to structure your salary smartly with:
Meal Coupons (e.g., Sodexo): Exempt up to Rs. 50/day
Telephone/Internet Reimbursement
Uniform Allowance
Books & Research Allowance (for professionals)
5. Leave Travel Allowance (LTA)
Can be claimed twice in a block of 4 years for travel within India. Covers travel fare for self and family. Ensure you keep travel tickets.
6. Section 80D – Medical Insurance
Deduction up to Rs. 25,000 for premiums paid for self, spouse, and children
Additional Rs. 25,000–50,000 for parents depending on their age
7. National Pension Scheme (NPS) – Section 80CCD(1B)
Additional deduction of Rs. 50,000 over and above the 80C limit for NPS contributions. Great for retirement planning and tax saving.
8. Education Loan Interest – Section 80E
If you’re repaying an education loan, you can claim the interest as a deduction for up to 8 years—no upper limit.
9. Home Loan Interest – Section 24(b)
Deduction of up to Rs. 2 lakhs annually on interest paid on a home loan for a self-occupied property.
Final Tip: Plan Early, Save More
Waiting until March to start tax planning is a common mistake. The earlier you plan your salary and investments, the more you save—without stress.
Need Help with Salary Structuring or Tax Planning?
Radgiver Business Advisors offers personal tax consultation to help you minimize taxes while staying fully compliant with the law. Let’s make your salary work smarter for you.
