New tax regime people save fierce tax! Zero tax will be charged on salary of ₹ 18 lakhs

Income Tax Savings: Many taxpayers believe that the new tax system is a tax exemption on income up to ₹ 12 lakhs. Earnings above that will be taxed. but it’s not like that. If you plan wisely, Zero tax can also be done on income of ₹ 18 lakh. That too completely through legal deduction and set-off. We will tell you how you can save maximum tax from tax even while in New Tax Regime. Especially with the benefits of home loan interest, it has double benefit.

Total Salary Calculation of ₹ 18,00,000 Tax

Suppose your annual gross salary is ₹ 18,00,000. New tax regime (default) is kept. You have hired your purchased house (Let-out property). The annual interest on home loans is ₹ 4,00,000. Other valid deductions have also been added.

Standard deduction

In New Tax Regime, now up to ₹ 75,000 has a standard deduction. This reduces your income to ₹ 17.25 lakhs. Meaning ₹ 18,00,000 – ₹ 75,000 = ₹ 17,25,000.

Home loan interest set-off

If you have hired a house, then interest of up to ₹ 2 lakh can be reduced in tax. Home loan interest set-off can be set-off in New Tax Reset. The government has limited its limit to 2 lakhs. Meaning ₹ 17,25,000 – ₹ 2,00,000 = ₹ 15,25,000.

NPS – Employer Contribution

If your company contributes up to 12% to NPS, then it is considered completely tax free. Suppose the company gives ₹ 2,16,000 (12%of ₹ 18l) in NPS annually, then ₹ 15,25,000 – ₹ 2,16,000 = ₹ 13,09,000.

Allowance found

If there are some valid allowances in your salary such as HRA or LTA, then they are also exempted from tax. Suppose ₹ 1,50,000 has such allowances, then ₹ 13,09,000 – ₹ 1,50,000 = ₹ 11,59,000.

Family Pension deduction or GIFT exemption

Family pension deduction or GIFT has a tax exemption of up to ₹ 50k. If you have received a gift of up to ₹ 50,000, that is also tax free. Meaning Final Taxable Income will be ₹ 11,09,000.