Income Tax on 35 Lakh Salary

Earning Rs. 35 lakh a year puts you in a higher tax bracket—but that doesn’t mean you have to give a big chunk away in taxes. With the right planning, you can reduce your tax outgo smartly. One of the most effective (and often overlooked) ways to save on tax is through life insurance. Not only does it protect your loved ones, but it also offers deductions under Section 80C and tax-free maturity benefits under Section 10(10D). Let’s break down how income tax works on a Rs. 35 lakh salary—and how life insurance can help you save more, stress less.

What is the Budget 2025 update on the income tax?

The Union Budget 2025 introduced significant updates to the income tax structure, impacting taxpayers across all income brackets. For individuals earning above Rs. 35 lakh annually, the new tax regime is generally more advantageous, particularly for those who cannot claim substantial deductions under the old regime.

Key updates for life insurance users:

• Higher standard deduction:

The new tax regime continues to offer a standard deduction of Rs. 50,000 for salaried individuals. This deduction can be further optimised by investing in life insurance policies, which allow for additional exemptions under Section 80C.

• Reduced surcharge rates:

High-income earners now benefit from reduced surcharge rates, making tax-saving strategies like life insurance even more appealing. For example, premiums paid towards ULIPs (Unit Linked Insurance Plans) are eligible for tax benefits under Section 10(10D).

• Tax-free maturity benefits:

Life insurance policies provide tax-free maturity benefits, making them an excellent tool for wealth accumulation.

Life insurance covers your family’s future—debts, income, education, and you can save tax on the premiums paid. Check plans and secure your future today! Get quote!

While the new tax regime has introduced some noteworthy updates, the old tax slabs remain unchanged for those who prefer traditional deductions. Here is what you need to know:

Key features of the old tax regime:

• Deductions under section 80C:

Premium payments for life insurance policies are still eligible for deductions up to Rs. 1.5 lakh annually.

• Tax-free death cover payouts:

Under both regimes, the death cover payout from life insurance policies remains tax-exempt, ensuring financial security for your family in unfortunate circumstances.

• Flexibility in tax planning:

The old regime offers more flexibility for individuals who want to leverage deductions from multiple sources, including life insurance, home loans, and ELSS (Equity Linked Savings Schemes).

Still confused about which tax regime to pick? Check plans and secure your financial goals today – Get quote!

Key budget highlights for high-income earners

The Budget 2025 has introduced several measures aimed at simplifying tax compliance and offering relief to high-income earners. Here are the critical takeaways for individuals earning above Rs. 20 lakh or Rs. 35 lakh annually:

• ULIP investments:

ULIPs combine insurance with investment, allowing policyholders to grow their wealth while enjoying tax benefits.

• Endowment plans:

Endowment plans provide guaranteed returns and tax exemptions, making them ideal for long-term savings.

• Additional riders:

High-income earners can enhance their coverage with riders like critical illness or accidental death benefits, which also qualify for tax exemptions.

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If your annual salary exceeds Rs. 35 lakh, life insurance can be a powerful tool to reduce your tax liability while securing your financial future. Here are actionable strategies to save taxes:

• Invest in ULIPs:

ULIPs offer dual benefits of insurance and investment, with tax-free maturity benefits under Section 10(10D).

• Opt for term plans:

Term insurance provides high coverage at affordable premiums, which are deductible under Section 80C.

• Maximise section 80C exemptions:

Use the Rs. 1.5 lakh limit effectively by including life insurance premiums in your tax-saving portfolio.

Income tax slabs under old vs new income tax regime

Choosing between the old and new tax regimes can be challenging, especially for high-income earners. Here is a simplified comparison:

Why life insurance fits both regimes:

• Old tax regime:

Leverage deductions under Section 80C and tax-free payouts for optimal savings.

• New tax regime:

While deductions are limited, life insurance maturity benefits remain tax-free, ensuring wealth accumulation.

For individuals earning Rs. 35 lakh annually, life insurance provides a range of tax-saving options. Here is how you can make the most of your investments:

• Premium payments:

Deduct premiums paid for life insurance policies under Section 80C.

• ULIP investments:

Enjoy tax-free returns and wealth growth through ULIPs.

• Endowment plans:

Secure guaranteed returns while benefiting from tax exemptions.

• Tax-free death cover:

Protect your family’s future with tax-free death cover payouts.

Conclusion

Life insurance is more than just a financial product—it is a comprehensive solution for wealth accumulation, tax savings, and family protection. Whether you are navigating the complexities of the new tax regime or optimising deductions under the old regime, life insurance provides unmatched benefits tailored to your needs.

Take the first step toward securing your financial future today—explore life insurance plans, calculate premiums, and get instant quotes to make informed decisions.