How to Save Tax for a Salary of 13 Lakhs?

Tax planning is an essential part of managing your finances, especially when your annual salary falls into the higher income brackets, such as Rs. 13 lakh. Understanding the differences between the old and new tax regimes and leveraging deductions can help you optimise your tax liability. Additionally, investing in secure options like Bajaj Finance Fixed Deposits (FDs) can provide assured returns while contributing to your tax-saving strategies under Section 80C.

Start planning your taxes today with tools like an FD calculator to estimate returns. Check FD rates and begin saving with a minimum deposit of Rs. 15,000. 

The old and new tax regimes differ significantly in terms of deductions, exemptions, and slab rates. Here is a detailed comparison:

Old tax regime

The old tax regime is ideal for individuals who can claim multiple deductions and exemptions. It allows taxpayers to reduce their taxable income through provisions like Section 80C (investments in ELSS, PPF, life insurance premiums), Section 80D (health insurance premiums), HRA exemption, and more. However, this regime involves more compliance and documentation.

Cons of new tax regime

The new tax regime simplifies tax filing by offering flat slab rates and fewer deductions. While it includes a higher standard deduction of Rs. 75,000, it excludes popular exemptions such as HRA and deductions under Section 80C and 80D. This regime is suitable for individuals who prefer straightforward tax calculations and have minimal investments or expenses.

Below is an approximate/tentative breakdown of a Rs. 13 lakh annual salary:

This structure may vary based on individual employment contracts. Tax-saving potential depends on how your salary components are distributed.

New tax regime

Under the new tax regime, deductions are limited to the standard deduction of Rs. 75,000 and employer NPS contributions.

Total Tax Payable: Rs. 78,988 (including 4% cess).

Old tax regime

The old tax regime allows multiple deductions that significantly reduce taxable income.

Total Tax Payable: Rs. 1,11,800 (including 4% cess).

Bajaj Finance Fixed Deposits offer interest rates up to 7.30% p.a. for senior citizens, making them an ideal choice for growing wealth effortlessly. Choose your FD tenure in a few steps. 

Deductions under the old tax regime

1. Section 80C:
   Investments in PPF, ELSS, NSC, and life insurance premiums can reduce taxable income by up to Rs. 1,50,000.
2. Section 80D:
   Health insurance premiums allow deductions of Rs. 25,000 (Rs. 50,000 for senior citizens).
3. HRA exemption:
   Claim exemption on house rent paid based on salary structure.
4. Section 24:
   Deduction of up to Rs. 2,00,000 for home loan interest payments.
5. Section 80CCD:
   Additional Rs. 50,000 deduction on NPS contributions.

Deductions under the new tax regime

1. Standard deduction:
   Rs. 75,000 is available to all salaried individuals.
2. Employer NPS contribution:
   Deduction of up to 14% of salary.

Establishing savings stability is crucial for financial security, and Bajaj Finance Fixed Deposit offers a dependable way to grow your savings with guaranteed returns. Start with as little as Rs. 15,000 and enjoy predictable gains that fit seamlessly into your budget plan.

Bajaj Finance Fixed Deposits offer a secure and reliable investment option to help you save taxes under Section 80C. With AAA/STABLE rating from CRISIL and ICRA ratings, these FDs ensure assured returns unaffected by market fluctuations.

Key features of Bajaj Finance Fixed Deposits:

• Attractive interest rates: Up to 7.30% p.a. for senior citizens.
• Flexible tenure options: Choose between 12 and 60 months.
• Minimal deposit requirement: Start with just Rs. 15,000.
• Benefits like auto-renewal, nomination, and loan against FD.

Explore FD options and calculate your maturity amount using the FD calculator.

Choosing the right tax regime and leveraging deductions can help you save significantly on taxes. Whether you prefer simplicity or detailed planning, understanding the nuances of both regimes is crucial. Additionally, investing in Bajaj Finance Fixed Deposits not only helps you save taxes but also grows your wealth with guaranteed returns.

Start your tax-saving journey today with Bajaj Finance Fixed Deposits. Check FD rates and secure your financial future!