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Finance Tips: Even if your salary is ₹15 lakh, you can still avail tax exemptions. Here, we explain how.

Finance Tips: Many people believe that an annual salary of ₹15 lakh inevitably leads to a heavy tax burden. However, significant savings are possible through proper tax planning. Income tax regulations offer several options to help lighten the tax load. If you are a salaried employee earning around ₹15 lakh annually, these strategies could prove very useful.

1. Choosing the Right Tax Regime

Taxpayers currently have two options: the old tax regime and the new tax regime. If you have substantial investments and tax-saving expenses, the old tax regime could prove more beneficial for you.

2. HRA and Home Loans

If you live in a rented house, House Rent Allowance (HRA) can help save tax. Meanwhile, those with home loans can avail deductions on interest payments under Section 24 and benefits on the principal amount under Section 80C.

3. Benefits of NPS

The National Pension System (NPS) has become a popular method for saving tax. An additional deduction of ₹50,000 is available under Section 80CCD(1B). It also strengthens your retirement savings.

4. Leveraging Section 80C

Under Section 80C of the Income Tax Act, you can claim a tax deduction of up to ₹1.5 lakh. This includes investments and expenses such as PPF, ELSS, life insurance premiums, EPF contributions, tax-saving FDs, and children's tuition fees. With proper planning, this deduction significantly helps in saving tax.

5. Health Insurance

If you have purchased health insurance, you can claim a tax deduction under Section 80D. There are separate deductions for premiums paid for yourself and your family, as well as additional benefits for insurance premiums paid for your parents.

What are the benefits of the new tax regime? The new tax regime has fewer tax slabs but does not offer most exemptions. However, the government has provided relief on income up to ₹12 lakh. Therefore, it is important to compare both systems before making a decision.

If you have significant investments and tax-saving expenses, the old tax regime might be better. Conversely, those without many deductions may find the new tax regime advantageous. You can also consult a tax expert if necessary.