How to Save Income Tax on Rs. 15 Lakh Salary – Complete Strategy Guide

At Rs. 15 lakh income, you sit at a genuinely interesting inflection point in India's tax system — high enough to benefit substantially from old-regime deductions, yet positioned exactly where recent slab revisions have made the new regime increasingly competitive. A worked comparison using real numbers, not just slab percentages, reveals which regime actually saves you more for FY 2025-26 specifically.

This page covers:

• Current tax slabs applicable to a Rs. 15 lakh salary
• Ten practical tax-saving strategies (old regime)
• What remains deductible under the new regime
• A complete worked example — old vs new regime for FY 2025-26
• Why the answer has shifted compared to FY 2024-25
• How home loans factor into your Rs. 15 lakh tax strategy

Earning a salary of Rs. 15 lakh or more puts you in a higher tax bracket, meaning your tax liability can be significant. Any earnings above Rs. 15 lakh attract a 30% tax rate under the new tax regime. Fortunately, the Income Tax Act allows various deductions and exemptions that can help lower your total tax outgo — with proper planning, you can reduce your taxable income considerably.

New tax regime slabs (FY 2025-26)

For a salary of Rs. 15 lakh specifically, you fall into the 15% tax slab under the new regime for the portion of income within that bracket.

Most deductions below apply only under the old tax regime, unless noted otherwise:

1. Section 80C deductions: Claim up to Rs. 1.5 lakh — EPF, PPF, NSC, ELSS, life insurance premiums, 5-year FDs, Sukanya Samriddhi Yojana, home loan principal repayment, and children's tuition fees.
2. Home loan tax benefits: Principal repayment up to Rs. 1.5 lakh (Section 80C); interest payment up to Rs. 2 lakh (Section 24b); additional benefits for first-time buyers under Section 80EE or 80EEA.
3. National Pension Scheme (NPS): Additional Rs. 50,000 deduction under Section 80CCD(1B), on top of Section 80C. Employer's contribution under Section 80CCD(2) is allowed in both regimes.
4. Medical insurance premium (Section 80D): Rs. 25,000 for self/spouse/children; Rs. 50,000 for senior citizen parents; preventive health check-up within these limits.
5. Standard deduction and professional tax: Rs. 50,000 (old regime) or Rs. 75,000 (new regime); professional tax deductible where applicable (usually Rs. 2,400/year).
6. HRA and LTA: House Rent Allowance exemption based on rent paid, city, and basic salary; Leave Travel Allowance for two domestic trips in a four-year block.
7. Exempt allowances: Conveyance/telephone (with bills), children's education (Rs. 100/month per child, max 2), hostel allowance (Rs. 300/month per child, max 2), food coupons (up to Rs. 50/meal).
8. Tax-saving fixed deposits: 5-year FDs eligible for Section 80C deduction up to Rs. 1.5 lakh (interest earned remains taxable).
9. Investment diversification: Spread your Section 80C limit across ELSS, term insurance, EPF, tuition fees, and SSY/NSC for a balanced portfolio.
10. Gifts and inheritances: Gifts from specified relatives are tax-free regardless of amount; gifts from non-relatives are tax-free up to Rs. 50,000/year; inheritances aren't taxable, though income earned from inherited assets is.

If your yearly salary is Rs. 15 lakh and you choose the new tax regime, several deductions remain available:

• Standard deduction of up to Rs. 75,000 for salaried individuals
• Employer's NPS contributions under Section 80CCD(2), deductible up to 14% of salary + DA
• Agniveer Corpus Fund investments under Section 80CCH
• Family pension deductions under Section 57(iia)
• Tax relief on gratuity, leave encashment, and VRS payouts under Sections 10(10), 10(10AA), 10(10C)
• Interest paid on home loans for rented-out properties, deductible under Section 24 (no limit, available in both regimes)
• Transport allowances for specially-abled persons, and job-related conveyance/travel reimbursements

Consider Ms. Maya, with a yearly salary of Rs. 15 lakh, receiving various allowances and investing in tax-saving instruments.
 

Under the old tax regime, she claims:

• HRA exemption: Rs. 1,00,000
• LTA: Rs. 20,000
• Children's education/hostel allowance: Rs. 9,600
• Standard deduction: Rs. 50,000
• Professional tax: Rs. 2,400
• Section 80C investment (PPF): Rs. 1,50,000
• NPS under Section 80CCD(1B): Rs. 50,000

• Section 80D medical insurance: Rs. 25,000

  Details	Old regime
  Gross salary	Rs. 15,00,000	Rs. 15,00,000
  Exemptions (HRA, LTA, etc.)	Rs. 1,29,600	Not applicable
  Standard deduction	Rs. 50,000	Rs. 75,000
  Professional tax	Rs. 2,400	Not applicable
  Chapter VI-A deductions (80C, 80CCD, 80D)	Rs. 2,25,000	Not applicable
  Net taxable income	Rs. 10,93,000	Rs. 14,25,000
  Total tax payable (incl. cess)	Rs. 1,46,016	Rs. 97,500

Tax breakdown (FY 2025-26):

• Old regime: Up to Rs. 2.5 lakh (Nil) + Rs. 2.5-5 lakh (Rs. 12,500) + Rs. 5-10 lakh (Rs. 1,00,000) + Rs. 10-10.93 lakh (Rs. 27,900) + 4% cess (Rs. 5,616) = Rs. 1,46,016
• New regime: Rs. 4-8 lakh at 5% (Rs. 20,000) + Rs. 8-12 lakh at 10% (Rs. 40,000) + Rs. 12-14.25 lakh at 15% (Rs. 33,750) + 4% cess (Rs. 3,750) = Rs. 97,500

Here's the genuinely important insight: in FY 2025-26, the new regime results in Rs. 48,516 lower tax for Ms. Maya compared to the old regime. But this wasn't always the case.

In FY 2024-25, the old regime actually offered more tax savings for an identical income and deduction profile. This reversal happened specifically because of the revised FY 2025-26 slab structure, which widened the lower tax brackets meaningfully.

The key lesson: Don't assume last year's "better regime" conclusion still holds this year — recalculate based on the current financial year's specific slab structure and your actual eligible deductions, since even a Rs. 15 lakh earner with substantial old-regime deductions can find the new regime now wins.

Property investment through home loans remains one of the most effective ways to maximise your Section 80C benefits while building long-term wealth. With Bajaj Finance, you can claim deductions on both principal repayment and interest payments, potentially saving substantially in taxes annually under the old regime. Bajaj Finance offers home loans from 7.25% p.a.* with amounts up to Rs. 15 Crore* and tenures up to 32 years. Check eligibility today.

At Rs. 15 lakh income, the old-versus-new regime decision genuinely requires fresh calculation each year rather than assuming prior conclusions still hold — FY 2025-26's revised slabs have shifted this balance meaningfully compared to previous years.