Minimize income tax this year.

Strategize investments to have zero income tax liability for individuals earning up to 10.5 lac per annum.

Salary        10,50,000 [Taxable]

80C           1,50,000 (10,50,000 - 1,50,000 = 9,00,000 [Taxable])

80CCD         50,000 (9,00,000 - 50,000 = 8,50,000 [Taxable])

80D           75,000 (8,50,000 - 75,000 = 7,75,000 [Taxable])

24b           2,00,000 (7,75,000 - 2,00,000 = 5,75,000 [Taxable])

80G           25,000 (5,75,000 - 25,000 = 5,50,000 [Taxable])

SD            50,000 (5,50,000 - 50,000 = 5,00,000 [Taxable])

87A           12,500 Income Tax Rebate


Net Income Tax = Rs. 0        

Invest Rs. 1,50,000 in Provident Fund, Employee Provident Fund, Home Loan (Principle Amount) & Guaranteed Insurance Plans (~10%). Invest Rs. 50,000 in NPS Tier 1. Secure your family's health with Health Insurance of up to Rs. 75,000 inclusive of your parents. Finalize the real estate property and apply for a home loan to claim a deduction of Rs. 2,00,000. In case you are not looking for a home loan then claim the nearly similar amount under the HRA.

God has given you a good salary, invest some portion (Rs. 25,000) of your salary to need one. One option is to invest in Prime Minister's Relief Fund. Standard Deduction is applicable for all salaried employees of Rs. 50,000.

If you sum up all the strategic investments then your taxable salary will come down to Rs. 5,00,000. Based on income tax calculations, you are liable to Pay an Income tax of Rs. 12,500.

Section 87A provides Tax rebate of Rs. 12,500 in case your taxable salary is less than or equal to 5 lac, Now your taxable salary is 5 Lac, Hence you don't have to pay any money to the government.

In this article, We have not spoken about other components of salary like Car Maintenance, Meal coupons, NPS (Employer contribution), Phone & Internet Bill, Children's Education, Gift vouchers, LTA, stationary Allowance, and so on. If Proper planning is done then for an individual earning up to Rs. 18-20 Lac, There will not be any income tax implications.

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