How much tax on Rs. 15 Lakh income

If you are an individual with a high income, particularly if your salary exceeds Rs. 15 lakh, you might be looking for tax-saving measures to minimise your tax liability. If you are confused about how much tax is applicable on a Rs. 15 lakh income, you should know that there is a 20% tax rate on the income slab above Rs. 15 lakh.

The Income Tax Act of India offers several opportunities for you as a taxpayer to avail of deductions, and decrease your tax obligations. With the right planning, you can save a significant amount of tax. In this article, we will first understand the new regime income tax slabs and their tax rates, and then look at the various tax saving measures that you can utilise for your benefit.

New tax regime slabs as per Union Budget 2024

As a working individual, you have to pay taxes on your annual income based on the proposed tax slab rates as per the Finance Bill during each budget session. However, under Section 115 BAC of the Income Tax Act 1961, the Union Budget 2024 has given an option to tax-paying citizens of the country - to choose between the old and the new tax slab rates, with varied approaches.

As per the current rules that apply, the new tax regime is by default the applicable option, unless you decide to switch to the old tax regime. If you use an income tax calculator judiciously, it will help you with your tax-planning exercises.

You can refer to the table below to understand how the old tax regime and the new tax regime are different in turns of the tax structure, and also the maximum income tax that is applicable without any exemptions, and deductions for the particular tax slabs:

Old Income Tax Slab (FY 2021-22)
Income Spread	Slab Rates (in percentage)	Maximum Tax to be Charged per Income Slab	Income Spread	Slab Rates (in percentage)	Maximum Tax to be Charged per Income Slab
Rs. 2.50 lakhs and below	Tax exempt	NIL	Rs. 3 lakhs and below	Tax exempt	NIL
Rs. 2.5 lakhs to Rs. 5 lakhs	5%	Rs. 12,500	Rs. 3 lakhs to Rs. 6 lakhs	5%	Rs. 15,000
Rs. 5 lakhs to Rs. 7.5 lakhs	10%	Rs. 12,500 + Rs. 25,000 = Rs. 37,500	Rs. 6 lakhs to Rs. 9 lakhs	10%	Rs. 15,000 + Rs. 30,000= Rs. 45,000
Rs. 7.5 lakhs to Rs. 10 lakhs	15%	Rs. 37,500 + Rs. Rs. 37,500= Rs. 75,000	Rs. 9 lakhs to Rs. 12 lakhs	15%	Rs. 45,000 + Rs. 45,000= Rs. 90,000
Rs. 10 lakhs to Rs. 12.5 lakhs	20%	Rs. 75,000 + Rs. 50,000= Rs. 1,25,000	Rs. 12 lakhs to Rs. 15 lakhs	20%	Rs. 90,000 + Rs. 60,000= Rs. 1,50,000
Rs. 12.5 lakhs to Rs. 15 lakhs	25%	Rs. 1,25,000 + Rs. 62,500= Rs. 1,87,500	More than Rs. 15 lakhs	30%	Calculated at 30% per annum rate as per annual income
More than Rs. 15 lakhs	30%	Calculated at 30% per annum rate as per annual income	More than Rs. 15 lakhs	30%

Additionally, you are required to pay cess at 4%, as well as a surcharge at rates applicable. Union Budget 2023 has capped the maximum surcharge applicable up to 25%.

New income tax slab rate table from july 2024

Here are the differences between pre-budget and post-budget income tax slabs as of July 2024:

Tax Slab (FY 2023-24)	Tax Slab	Tax Slab (FY 2024-25)	Tax Slab
Up to Rs. 3 lakh	NIL	Up to Rs. 3 lakh	NIL
Between Rs. 3 lakh to Rs. 6 lakh	5%	Between Rs. 3 lakh to Rs. 7 lakh	5%
Between Rs. 6 lakh to Rs. 9 lakh	10%	Between Rs. 7 lakh to Rs. 10 lakh	10%
Between Rs. 9 lakh to Rs. 12 lakh	15%	Between Rs. 10 lakh to Rs. 12 lakh	15%
Between Rs. 12 lakh to Rs. 15 lakh	20%	Between Rs. 12 lakh to Rs. 15 lakh	20%
Over Rs. 15 lakh	30%	Over Rs. 15 lakh	30%

Points to note

Here are some important points to remember when understanding how much tax is applicable on a Rs. 15 lakh income.:

• In both the old and the new tax regimes, the minimum income tax slab rate is 5%, and the maximum income tax slab rate is 30%.

• The old tax slab structure includes seven income ranges with particular income tax rates applicable to each.

• The new tax slab structure, however, has six income ranges. This has lowered the tax slab rates, having removed the earlier income tax rate that was applicable at 25%.

• The old income tax structure continues with many deductions and exemptions as per Section 80C, Section 80D, Section 80CCD, and more.

• The catch, you must understand, in the new income tax regime is that you will have to give up on deductions as well as exemptions while computing your tax liability.

• As a result, the flexibility to lower individual tax liability is more advantageous for the high-income group under the new tax slab rate structure.

• However, this benefit may come at a cost for the low and middle-income groups if they forgo all the allowable deductions and exemptions available under the old structure.

How to save tax for salary above Rs. 15 lakhs?

The income tax slab structure is to ensure that your tax liabilities grow alongside the growth in your income. Luckily, there are several options you can adopt to save taxes on your Rs. 15 lakhs income, which have been laid down by the Income Tax Act 1961. Tax-saving instruments, needless to say, have always been in high demand among tax-paying individuals trying to figure out how much tax is applicable on a 15 lakh income.

Income tax exemptions under old tax regime

First, let us see how you can save Rs. 1.5 lakhs on your taxable income as per Section 80C, Section 80CCC, and Section 80CCD:

1. Financial protection instruments

• Term insurance

• Life insurance

2. Retirement and long term objectives

• Public Provident Fund or PPF

• Employee Provident Fund or EPF

• Unit Linked Insurance Plans or ULIP

• Pension or Annuity Plans from insurance providers

• National Pension Scheme or NPS Tier-I Account

• Senior Citizen’s Savings Scheme or SCSS

• Invest in Real Estate

3. Investment for your child’s future

• Sukanya Samriddhi Scheme or SSS

• Child Plans from insurance providers

4. Wealth protection

• National Savings Certificate or NSC

• Tax saving deposits - 5 year

• Life insurance endowment and money-back plans

Additional Rs. 50,000 reduction through Section 80CCD

Under the National Pension System (NPS), statutory deductions are permitted as follows:

• For salaried individuals, the usual deduction is 10% of the monthly salary, increasing to 14% for government employees and bankers.

• For self-employed individuals, the contribution can be up to 20% of the annual income.

• An additional Rs.50,000 contribution over the statutory deduction is allowed, enabling you to claim a tax exemption for an equivalent amount.

Save up to Rs. 75,000 on your tax liability under Section 80D

You can reduce your tax burden by purchasing health insurance policies under this section in the following cases:

Health Insurance for Yourself and Your Family:

• Premium up to Rs. 25,000 for individuals under 60 years of age.

• Coverage extends to children up to 25 years.

Health Insurance for Parents:

• Premium up to Rs. 50,000 for senior citizen parents.

• The limit is Rs. 25,000 if your parents are not senior citizens.

Preventive Health Check-up:

• Additionally, Rs. 5,000 is allowed for a health check-up under each policy.

Reduce your tax liability up to Rs. 2 lakhs under Section 24

• You can claim a deduction of up to Rs. 2 lakhs on housing loan interest payments under Section 24(B).

• Principal repayments made during the financial year can be claimed under Section 80C.

• As per the Union Budget 2023, standard tax deductions up to Rs. 52,000 are permitted under the old tax regime (previously capped at Rs. 50,000).

Income tax exemptions under new tax regime

With the income tax rates having been lowered for specific income slabs, the government has now removed the tax exemptions that were previously available.

However, you can claim the follower deductions and tax exemptions as per the new tax regime:

• Tax rebate for income up to Rs. 7 lakhs (previously Rs. 5 lakhs under the old tax regime)

• Deductions are available for contributions to the employee’s pension fund under Section 80CCD(2) of the Income Tax Act 1961.

Income tax for Rs. 15 lakhs salary in India

To calculate how much tax is applicable on a 15 lakh income in India, the computation will be without any deductions, apart from the standard deductions specified in the new tax regime.

Therefore, you can significantly reduce your income tax liability by utilising the above-mentioned investment avenues under the old regime, depending on the tax benefits you gain when comparing the old vs. new income tax regimes.

Calculating tax for Rs. 15 lakhs salary in India under old vs. new income tax regime

Here are the summarised details of the overall permissible amount of an annual income of Rs. 15 lakhs:

Old Income Tax Slab Structure
Title	Amount	Title	Amount
Total Salary		Total Salary
Annual Income	Rs. 15,00,000	Annual Income	Rs. 15,00,000
Deduction		Deduction	No tax exemptions are available
Section 80C	Rs. 1,50,000	Section 80C	--
Section 80D	Rs. 25,000	Section 80D	--
NPS Deductions	Rs. 25000	NPS Deductions	--
Deduction for Interest paid on House Loan	Rs. 50,000	Deduction for Interest paid on House Loan	--
Total Tax Deductions	Rs. 2,50,000	Total Tax Deductions	NIL
Taxable Income	Rs. 12,50,000	Taxable Income	Rs. 15,00,000
Slab Rates	Tax Amount	Slab Rates	Tax Amount
5%( for tax slab of Rs. 2.5 lakhs- 5lakhs)	Rs. 12,500	5% (for tax slab of Rs. 3 lakhs- 6 lakhs)	Rs. 15,000
10% (for tax slab of Rs. 5 lakhs-Rs. 7.5 lakhs)	Rs. 25,000	10% (for tax slab of Rs. 6 lakhs- Rs. 9 lakhs)	Rs. 30,000
15% (for tax slab of Rs. 7.5 lakhs- Rs. 10 lakhs)	Rs. 37,500	15% (for tax slab of Rs. 9 lakhs- Rs. 12 lakhs)	Rs. 45,000
20% (for tax slab of Rs. 10 lakhs- 12.5 lakhs)	Rs. 50,000	20% (for tax slab of Rs. 12 lakhs- Rs. 15 lakhs)	Rs. 60,000
25% (for tax slab of Rs. 12.5 lakhs- 15 lakhs)	NOT APPLICABLE (as taxable income is Rs. 12,50,000)	--	--
Total Tax	Rs. 12,500+ Rs. 25,500+ Rs. 37,500+ Rs. 50,000= Rs. 1,25,000	Total Tax	Rs. 15,000+ Rs. 30,000+ Rs. 45,000+ Rs. 60,000= Rs. 1,50,000
Cess @ 4%	= 4% of Rs. 1.25 lakhs= Rs. 5,000	Cess @ 4%	= 4% of Rs. 1.5 lakhs= Rs. 6,000
Tax as per Slab Rates + Cess	Rs. 1,25,000+ Rs. 5,000= Rs. 1,30,000	Tax as per Slab Rates + Cess	Rs. 1,50,000+ Rs. 6,000= Rs. 1,56,000
Total Tax Liability	Rs. 1,30,000	Total Tax Liability	Rs. 1,56,000

Points to Note

Here are some points that you should remember while understanding how much tax is applicable on Rs. 15 lakh income:

The tax liability under the old tax regime is slightly lower than under the new regime, with a difference of Rs. 26,000 annually.

When filing your ITR for the relevant financial year, you have the option to choose either tax structure, depending on the tax exemptions you qualify for, based on your annual income and investments.

Notably, by increasing your deductions beyond Rs. 2.5 lakhs, you can further reduce your tax liability under the old tax regime, particularly if your annual salary is up to Rs. 15 lakhs.

However, it's worth noting that tax-saving investments under the old regime generally yield lower returns.

Therefore, it may be beneficial to consider the new tax structure, which allows more flexibility for investing in market instruments, potentially leading to higher returns and wealth creation.

Conclusion

There are several benefits under the two income tax slab structures that you as a taxpayer must take into consideration. Understand the two options and carefully choosing one would help you save taxes. Additionally, the new structure is less complicated for you to understand, which makes it easier to understand how much tax is applicable on Rs. 15 lakh income.

If you are looking for tax saving instruments and different ways of making investments, Bajaj Finserv Mutual Fund Platform offers multiple ELSS mutual fund schemes that you can take a look at. Additionally, there is a mutual fund calculator you can use, compare mutual funds before you come to a decision regarding investing in mutual funds.