Maximise your Tax Savings today
Invest early to reap best returns
They say tax and death are probably the only things you cannot avoid. We don't know about death, but yes, you can definitely cut down your tax if you invest in certain tax-saving products.
You can legally save tax through the following:
- Investment under section 80C, 80CCC, and 80CCD such as equity-oriented mutual funds, PPF, EPF, Life Insurance policy etc.
- Insurance under 80D, 80DD, 80DDB
- Home and education loans
- On long term capital gains
- Donations etc.
| Income Tax Slab | Tax Rate for Individuals Below the Age of 60 |
|---|---|
| Up to Rs. 2,50,000 | No tax |
| From Rs. 2,50,001 to Rs. 5,00,000 | 5% |
| From Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
As per the current income tax slabs, taxation of income of resident individuals below 60 years is as follows:
- Income up to Rs 2.5 lakhs is exempt from tax
- 5% tax on income between Rs 250,001 to Rs 5 lakhs
- 20% tax on income between Rs 500,001 and Rs 10 lakhs
- 30% tax on income above Rs 10 lakhs
Individuals with Net taxable income less than or equal to Rs. 5 lakhs will be eligible for tax rebate u/s 87A ( Maximum Rs. 12,500) i.e tax liability will be nil of such individuals in both – New as well as old tax system
| Income Tax Slab | Tax Rate for Individuals Above the Age of 60 |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to Rs. 5,00,000 | 5% |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
As per the current income tax slabs, taxation of income of resident individuals above 60 years is as follows:
- Income up to Rs 3 lakhs is exempt from tax
- 5% tax on income between Rs 300,001 to Rs 5 lakhs
- 20% tax on income between Rs 500,001 and Rs 10 lakhs
- 30% tax on income above Rs 10 lakhs
Individuals with Net taxable income less than or equal to Rs. 5 lakhs will be eligible for tax rebate u/s 87A ( Maximum Rs. 12,500) i.e tax liability will be nil of such individuals in both – New as well as old tax system
| Income Tax Slab | Tax Rate for Individuals Above the Age of 80 |
|---|---|
| Up to Rs. 5,00,000 | Nil |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Download Tax Saving Guide for FY 2024-25
| Income Tax Slab | Tax Rate for Individuals Below the Age of 60 |
|---|---|
| Up to Rs. 3,00,000 | No tax |
| From Rs. 3,00,001 to Rs. 6,00,000 | 5% |
| From Rs. 6,00,001 to Rs. 9,00,000 | 10% |
| From Rs. 9,00,001 to Rs. 12,00,000 | 15% |
| From Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs. 15,00,000 | 30% |
Individuals with Net taxable income less than or equal to Rs.7 lakh will be eligible for tax rebate u/s 87A (Maximum Rs. 25,000) i.e tax liability will be nil of such individuals in both – New as well as old tax system
The income tax rates mentioned above are for the total income earned in a year. Following this, surcharge and cess are added to the total tax payable. The surcharge is applicable on the basis of income thresholds as follows:
| Income Tax Slab | Tax Rate |
|---|---|
| For income above Rs. 50 lakh and up to Rs. 1 crore | 10% surcharge |
| For income above Rs. 1 crore and up to Rs. 2 crore | 15% surcharge |
| For income above Rs. 2 crore and up to Rs. 5 crore | 25% surcharge |
| For income above Rs. 5 crore | 37% surcharge |
Additionally, a health and education cess of 4% is applicable on the income tax payable, including surcharge.
In light of the new tax regime being introduced, it’s important for individuals to calculate their income, their deductions and the amount of tax they’re currently paying. Then, they should calculate their tax payable under the new regime, which excludes deductions and exclusions, in order to better understand which regime suits them and their personal finances better.
While the budget proposals provide for a new regime of taxation for Individuals and HUFs to opt for lower tax brackets without claiming any exemptions/deductions, it would certainly be imperative for the working age group to continue to focus on savings for their future needs, namely children’s future and maintaining standards of living post retirement, among others. Also, they will need to ensure they protect their families against any health or life eventualities, especially as our household borrowings increase and the shield of joint family system is no longer available. Such savings can be achieved along with tax benefits which are available under various sections of the Income-tax law under the existing tax regime.
