How to save tax for salary above Rs. 15 lakh

To save tax on a 15 lakh salary, leverage deductions under Section 80C for investments like EPF, PPF, insurance, and utilise other deductions such as HRA, LTA, and medical expenses.
How to save tax for salary above Rs. 15 lakh
3 min

Filing your tax returns is one of the most important aspects for ensuring that you adhere to tax compliance in India. The Indian government requires every earning Indian citizen to pay taxes on all the income they have earned in a financial year. The same goes for salaried employees who receive a predetermined amount every month. However, the Indian government has made provisions under the Income Tax Act of 1961 that allow taxpayers to lower their taxable income and decrease the final tax amount.

This blog will help you understand how to save tax on a salary above Rs. 15 lakh to ensure you lower your tax liability and increase your savings.

Tax slabs under old vs New regime

The Indian government introduced a new tax regime in the Union Budget 2020 and provided an option for taxpayers to choose between the old and the new tax regime. Here is the income tax slabs for FY 24-25 under the new regime and the old regime:

Tax savings for salary above 15 lakh

If you have a salary above Rs. 15 lakh, numerous components in your salary are exempted from tax. The net taxable income on your Rs. 15 lakh salary is calculated in the following ways:



1. Gross salary

Total salary before any deductions

2. Less: Exemptions

Under various sections of the Income Tax Act

Standard deduction

Fixed deduction available to all salaried individuals

House rent allowance

Exempted as per applicable rules

Other exemptions

Leave travel allowance, etc.

3. Net salary

After deducting exemptions (1 - 2)

4. Less: Deductions

Under various sections of the Income Tax Act

Section 80C

Investments in ELSS, PPF, etc.

Section 80D

Health insurance premiums

Section 80CCD(1B)

NPS contributions

Other deductions

Interest on education loans, etc.

5. Total deductions

Sum of all deductions

6. Net taxable income

After all deductions (3-5)


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

Here is how you can save tax for a salary above Rs. 15 lakh:

1. Understanding tax slabs and exemptions

There are two tax regimes after the Union Budget 2020, and you have the option to choose between the two for filing your taxes. However, they both have different tax slabs and exemptions available. For example, while the tax slabs are higher in the old tax regime than the new one, it contains more exemptions that aren’t available in the new regime. Hence, it is important that you understand the tax slabs and the exemptions to determine which tax regime will help you pay a lower tax amount.

2. Opting for the right tax regime

After you have understood the tax slabs and exemptions of both tax regimes, it is vital that you choose the right tax regime. If you are looking to utilise all the deductions and exemptions available under various sections, you can opt for the old tax regime. However, if you do not want to invest in various schemes and do not have exempted expenses, you can choose the new tax regime.

3. Leveraging exemptions

Utilising exemptions is one of the most important factors in saving tax on a Rs. 15 lakh salary. Review your salary structure and understand what expenses are exempted from tax. You can lower your tax liability and claim tax exemptions on components like Leave Travel Allowance (LTA), House Rent Allowance (HRA), and certain other reimbursements.

4. Utilising deductions

Income tax deductions can significantly lower your tax liability. You can leverage the standard deduction of Rs. 50,000 and up to Rs. 1.5 lakh on section 80C options like PPF, ELSS, or life insurance. Furthermore, you can claim up to Rs. 25,000 under Section 80D for health insurance premiums and an additional Rs. 50,000 for senior citizen parents.

5. Investing in Provident Funds (PF)

Investing in Provident Funds can give you the dual benefit of tax-saving and long-term steady earnings. If you have a salary above Rs. 15 lakh, you can lower your tax liability by contributing to the Employees’ Provident Fund, as the contributions are tax deductible under section 80C. Another tax-saving option is the Public Provident Fund (PPF), where investments up to Rs. 1.5 lakh are tax-exempt under section 80C.

6. Exploring Equity-Linked Savings Schemes (ELSS)

For a salary above Rs. 15 lakh, you can invest in Equity-Linked Savings Schemes (ELSS) to lower your tax liability. Under section 80C of the Income Tax Act, investments in ELSS funds qualify for a deduction of up to Rs. 1.5 lakh annually, reducing taxable income.

7. National Pension System (NPS)

Investing in the National Pension System (NPS) is also an ideal solution to save tax for a salary above Rs. 15 lakh. Contributions made to NPS are eligible for tax deductions under section 80CCD(1) of the Income Tax Act. Taxpayers can claim deductions up to Rs. 1.5 lakh under section 80C, and an additional Rs. 50,000 under section 80CCD(1B) for contributions made exclusively to NPS.

8. Consideration of Long-term Capital Gains

Long-term capital gains tax of 20% is levied on assets held for more than three years, such as stocks and mutual funds. It is important to consider LTCG tax if you are looking to lower your tax liability. You can minimise your tax liability on LTCG through several methods, such as reinvesting LTCG into specified bonds such as REC or NHAI bonds within six months, receiving an exemption under section 54EC. Furthermore, you can invest in residential property using LTCG to qualify for exemptions under section 54 or section 54F.

Which regime is better for 15 lakh LPA to save tax?

Here is a detailed side-by-side comparison of the old and new tax regimes for you to understand which regime is better for Rs. 15 lakh LPA to save tax:


Old tax regime (in Rs.)

New tax regime (In Rs.)

Gross salary



Less: Standard deduction



Net salary after standard deduction






Section 80C


Not applicable

Section 80D


Not applicable

Section 24(b)


Not applicable

Section 80CCD(1B)


Not applicable

Total deductions



Net taxable income




Tax calculation

Old tax regime (in Rs.)

New tax regime (In Rs.)

Income up to Rs. 2.5 lakh



Income from Rs. 2.5 lakh - Rs. 5 lakh



Income from Rs. 5 lakh - Rs. 7.5 lakh



Income from Rs. 7.5 lakh - Rs. 10 lakh



Income from Rs. 10 lakh - Rs. 12.5 lakh



Income from Rs. 12.5 lakh - Rs. 15 lakh



Total tax payable



Cess (4%)



Total tax liability



Here, you can see that because of the new regime's lower tax slabs, you pay lower taxes on your Rs. 15 lakh salary even when using various deductions available under the old tax regime.

Also read about: Section 80C of Income Tax Act

Tax saving under new tax regime

Here are the tax-saving options under the new tax regime:

Standard deduction

Basic deduction for salaried individuals

Section 80CCD(2)

Employer contribution to NPS

Section 80CCH

Investments made in Agniveer corpus

Section 57(iia)

Family pension received

Section 10(10C)

Voluntary retirement

Section 10(10)


Section 10(10AA)

Leave encashment

Section 24

Interest on a home loan on the let-out property 

Furthermore, some other deductions under the new regime are as follows:

  • Transport allowance if you are a specially-abled person.
  • Conveyance allowance to cover the expenses incurred for travelling as part of the employment.

Tax savings under old tax regime

Here are all the tax-saving options under the old tax regime:


Section 80D - health insurance premium

Rs. 25,000 for self, spouse, and dependent children

Rs. 50,000 if above 60 years of age

Parents: Rs. 25,000 and Rs. 50,000 if above 60 years of age

Section 80 E-education loan

Deduction for 8 years from the year of repayment of education loan taken for self, spouse, dependent children, or for a student for whom the individual is a legal guardian.

Section 80G - donating to charity

50% of 100% of the donated amount for notified institutions.  

Section 80C investing in tax saving instruments

Tax benefits up to Rs. 1.5 lakh. Some investing options include:

  • Public Provident Fund (PPF)
  • Employees’ Provident Fund (EPF)
  • Equity Linked Saving Scheme funds (ELSS)
  • Home loan repayment and Stamp duty
  • Sukanya Smriddhi Yojana (SSY)
  • National Savings Certificate (NSC)
  • Fixed Deposit for 5 years and more

Section 80DD- costs to treat disabled dependents

If you bear the medical cost for disabled dependants, you are eligible for tax relief:

  • 40% disability: Rs. 75,000
  • 80% or severe disability: Rs. 1.25 lakh

Home loan payments

Principal amount: Up to Rs. 1.5 lakh u/s 80C

Interest amount: Up to Rs. 2 lakh paid under section 24b

The maturity amount of a Life Insurance Policy

You can take a tax benefit on the maturity proceeds if the sum assured is less than:

  • 20% for policies issued before 1 April 2012
  • 10% for policies issued after 1 April 2012
  • 15% for policies issued after 1 April 2013 for a person with a disability.

Also read: Short-term capital gains tax

How do I save tax for a 15 LPA salary without a housing loan?

Without a housing loan, you won’t be able to claim a deduction up to Rs. 1.5 lakh under section 80C and for the interest amount up to Rs. 2 lakh under section 24b. However, you can maximise other deductions under section 80C by investing in schemes such as the Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), Employee Provident Fund (EPF), National Savings Certificate (NSC), and more, getting a tax deduction up to Rs. 1.5 lakh.

Additionally, you can contribute up to Rs. 50,000 to the National Pension System (NPS) under section 80CCD(1B) for an additional deduction. Furthermore, you can use other directions available to you in the old or the new tax regime to save tax, even if you do not have a housing loan.


If you earn around Rs. 15 lakh salary every year, you may end up paying a high amount of tax. However, there are numerous methods to ensure that you lower your tax liability as much as possible. Compare both tax regimes and ensure that the one you choose will help you pay a lower tax amount based on the available exemptions and deductions. Effective tax planning will help you save tax and increase your savings, which you can invest further in ideal investment instruments such as mutual funds schemes. Now that you know how to save tax for a salary above Rs. 15 lakh, you can lower your tax liability.

If you are considering investing in mutual funds, you can visit the Bajaj Finserv Platform, where you can use unique tools, such as mutual fund calculators, to compare mutual funds and invest in the most suitable schemes.

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Frequently asked questions

How much tax is paid on 15 lakhs?
There is no specific amount of tax that is paid on a Rs. 15 lakh salary. The tax you end up paying depends on the tax regime you choose and the exemptions you utilise. As the tax slabs and exemption limits are different in both tax regimes, the tax amount also varies.
How to make zero tax for 15 lakhs on salary?
You can start by claiming the standard deduction of Rs. 50,000 and invest Rs. 1.5 lakh in section 80C options like ELSS and PPF. You can also use deductions available under section 80D of Rs. 25,000 and Rs. 50,000 for senior citizens. Furthermore, you can lower your tax liability by investing Rs. 50,000 in NPS under section 80CCD(1B).
Which tax regime is better for 15 LPA?
If your tax-saving investments are greater than Rs. 3,75,000, the old tax regime will provide you with a lower tax liability. If your tax-saving investments are lower than Rs. 3,75,000, the new tax regime will help you pay lower taxes.
Can you save 100% on tax?
Saving more on taxe requires extensive and careful tax planning and using all the exemptions and deductions available for lowering the tax liability to zero.
How much income is tax-free according to the Income Tax Act?
Under the old tax regime, income up to Rs. 2.5 lakh is tax-free, and in the new tax regime, you do not have to pay income tax on the amount up to Rs. 3 lakh.
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The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

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