Tax Savings Strategies for Salary above Rs 30 lakh in India

 

Steady growth in salary means a consequent rise in income tax figures too. With the changes made in the new tax regime in Budget 2023, it’s even more difficult to enjoy deductions if you are in a higher salary bracket of more than Rs 7 lakh per annum However, with the option to still follow the old regime, the tax can be reduced if you efficiently utilise various deduction avenues through the best investment plan. Thus, for hefty salary amounts like those above Rs 30 lakh per annum mark in India, having a proper tax savings strategy is essential. 

The basics of a tax savings strategy

As a salaried employee in India, one can claim tax deductions under sections 80C, 80CC and 80CCD. But additionally, there are legal methods to reduce the tax further. According to the Income Tax Act, citizens can save money on taxes through deductions of certain expenses from taxable income.

How to save on taxes for salaries over Rs 30 lakh?

To save taxes, it’s important to know all the possible ways of claiming a deduction. The best investment plan in India is surely the one that effectively utilises these scopes. Here’s how you can avail of every tax benefit.

Deductions under sections 80C, 80CC, and 80CCD: Under these sections, save on taxes by investing in life insurance, ULIP Plan, PPF accounts, pension plans, National Savings Certificates (NSC), Fixed deposits etc. A total deduction of Rs 1.5 lakhs can thus be claimed. Here the best ULIP plans or the best retirement plans can help you reap the maximum tax benefits. One can also buy term insurance for this purpose.

Medical costs: Reduce the payable tax by deducting medical expenses from the taxable income subject to sections 80D and 80DDB. Money spent on health insurance is also eligible for a claim.

Education loan: Section 80E allows you to claim deductions for paying interest on an education loan, taken for yourself, your spouse or your child.

Home loan: Buy a house and get a deduction of the principal amount of your home loan under 80C and of the interest paid under section 24.

House Rent Allowance: The house rent allowance deducted from salaries can be claimed as a deduction.

Leave Travel Allowance: Leave travel allowance (LTA) received from the employer is tax-free. It can be claimed twice in four years to travel anywhere in India.

Capital gains: Get tax deductions for capital gains earned through selling long-term capital assets and investing them in financial instruments.

ELSS Mutual funds: Investment in ELSS mutual funds is another way to save taxes.

By availing the above investment options, an individual with higher salary income can save substantial taxes.

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ARN- INT/ED/08/23/3876