How to save tax on Rs. 9 lakh salary

If your net taxable income is Rs. 9 lakh under the new tax regime for the assessment year 2024-25, the tax you would owe can be calculated using the applicable slab rates. For income between Rs. 7.5 lakhs and Rs. 9 lakhs, the tax rate is 10%
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3 min
27-June-2025

If you are a salaried professional earning more than Rs. 9 lakh a year, chances are you’ve felt the pinch of income tax eating into your savings. While paying taxes is a responsibility, it’s also smart to explore every legal way to reduce your taxable income. The good news? Whether you opt for the old or new tax regime, there are still several ways to bring down your tax bill. If your salary crosses Rs. 9 lakh, taxes can significantly reduce your take-home income. But with the right tax-saving strategies, you can legally reduce your tax outgo and increase your annual savings. One of the smartest ways? Combining tax-saving investments with a life insurance plan that not only helps you save tax under Section 80C but also secures your family’s future.

Budget 2025: New income tax slabs offer significant savings for incomes of Rs. 9 lakh or more

In Union Budget 2025, Finance Minister Nirmala Sitharaman announced revised income tax slabs under the new tax regime, effective from April 1, 2025 (FY 2025–26). These new slabs aim to offer more relief to individuals earning between Rs. 7 lakh and Rs. 10 lakh, though there’s no change in the basic exemption limits for either tax regime.

The key highlight? If your taxable income is up to Rs. 7 lakh, you pay zero tax under the new regime—thanks to the rebate under Section 87A. For incomes above that, the new slabs offer progressive tax rates as follows:

  • Up to Rs. 4,00,000 – Nil
  • Rs. 4,00,001 to Rs. 8,00,000 – 5%
  • Rs. 8,00,001 to Rs. 12,00,000 – 10%
  • Rs. 12,00,001 to Rs. 16,00,000 – 15%
  • Rs. 16,00,001 to Rs. 20,00,000 – 20%
  • Rs. 20,00,001 to Rs. 24,00,000 – 25%
  • Above Rs. 24,00,000 – 30%

The 2025 Budget introduced revised tax slabs aimed at benefiting middle-income earners, especially those earning between Rs. 7–10 lakh. To truly benefit, it's vital to match your investment strategy with these new slabs.

Proposed income tax slabs for the new tax regime

Let’s take a closer look at how the proposed income tax slabs under the new regime compare to the previous ones.

Income Range

Current Tax Rate

Proposed Tax Rate

What’s Changed?

Up to Rs. 3,00,000

Nil

Nil

No change

Rs. 3,00,001 – Rs. 6,00,000

5%

5% (till Rs. 7L)

Slab expanded by Rs. 1 lakh

Rs. 6,00,001 – Rs. 9,00,000

10%

10% (from Rs. 7L)

Slab expanded by Rs. 1 lakh

Rs. 9,00,001 – Rs. 12,00,000

15%

15%

Continuity maintained

Rs. 12,00,001 – Rs. 15,00,000

20%

20%

No change

Above Rs. 15,00,000

30%

30%

No change


What does this mean for you?
With the slab changes, incomes between Rs. 7–10 lakh will be taxed at lower rates than before. While you can’t claim traditional deductions under the new regime, the tax benefit from lower rates may still work in your favour especially if you haven’t invested in instruments like ELSS or PPF.

Tax slabs under old vs. new tax regime – FY 2023–24 and FY 2024–25

Still deciding which regime to choose? It helps to compare how the tax slabs have evolved for both financial years. The table below shows how the new regime has been adjusted in FY 2024–25 to benefit middle-income earners:

Tax Slab

FY 2023–24 Rate

FY 2024–25 Rate

Change

Upto Rs. 3 lakh

Nil

Nil

No change

Rs. 3 lakh – Rs. 6 lakh

5%

Rs. 3L–Rs. 7L @ 5%

Slab extended by Rs. 1 lakh

Rs. 6 lakh – Rs. 9 lakh

10%

Rs. 7L–Rs. 10L @ 10%

Slight slab shift

Rs. 9 lakh – Rs. 12 lakh

15%

15%

No change

Rs. 12 lakh – Rs. 15 lakh

20%

20%

No change

Above Rs. 15 lakh

30%

30%

No change


If you're leveraging the old regime, maximise your 80C and 80D benefits by investing in instruments that give both tax savings and long-term returns like ELSS funds or PPF.

Tax saving above Rs. 9 lakh salary under the new regime

While the new regime does away with most exemptions and deductions, that doesn’t mean you're left without any tax-saving options. Here are a few benefits you can still claim under the new tax regime, even with a salary above Rs. 9 lakh:

Section

Benefit

Standard deduction

Rs. 50,000 for salaried individuals (increased to Rs. 75,000 as per Budget 2024)

80CCD(2)

Employer’s contribution to NPS – deductible up to 10% of basic salary

80CCH

Contributions to Agniveer Corpus Fund

57(iia)

Deduction for family pension received

10(10C)

Exemption on voluntary retirement compensation

10(10)

Exemption for gratuity received

10(10AA)

Leave encashment on retirement

Section 24

Interest on home loan for a let-out property (not self-occupied)


Additional exemptions still allowed:

  • Conveyance allowance for travel related to work

  • Transport allowance for specially-abled employees

So, even though the new regime is simpler, you can still bring down your taxable income if you make use of these available exemptions.

Tax saving above Rs. 9 lakh salary under the old regime

If you're someone who invests smartly or has eligible expenses, the old tax regime gives you much more room to lower your taxable income. Here’s a look at the key deductions you can use:

  • Section 80C: Invest up to Rs. 1.5 lakh in options like PPF, ELSS, EPF, NSC, life insurance premiums, children’s tuition fees, or even stamp duty and home loan principal repayment.

  • Section 24(b): Claim up to Rs. 2 lakh on the interest paid on a home loan for a self-occupied house.

  • Section 80D: Deduction on health insurance premiums—

    • Rs. 25,000 for self/family below 60

    • Rs. 50,000 if parents are senior citizens

  • Section 80E: Interest on education loan (deduction for 8 years)

  • Section 80G: Donations to registered charities (50% or 100% deduction based on institution)

  • Section 80CCD(1B): Additional Rs. 50,000 deduction for NPS contributions

  • Section 80DD: Expenses on a dependent with disability (Rs. 75,000 or Rs. 1.25 lakh depending on severity)

The old regime rewards tax-saving behavior. So, if you’re already investing or have expenses that fall under these sections, you might end up saving more tax than with the new regime.

How to save tax for salary above Rs. 9 lakh?

Want to lower your tax liability without compromising your financial goals? Start with these practical steps:

1. Choose the right tax regime:
Compare both old and new regimes. The old regime gives access to deductions and exemptions, while the new regime offers lower rates with limited deductions. Use online tax calculators to see which regime works best for your financial situation.

2. Claim the standard deduction:
Every salaried employee gets a flat deduction. Under the old regime, it’s Rs. 50,000. Budget 2024 raised this to Rs. 75,000 in the new regime, boosting savings without any paperwork.

3. Home loan interest deduction:
If you’ve taken a home loan, you can claim:

  • Up to Rs. 1.5 lakh on principal (Section 80C)

  • Up to Rs. 2 lakh on interest (Section 24)

Example:
If your gross income is Rs. 8.5 lakh and you claim Rs. 2 lakh under Section 24, your taxable income drops to Rs. 6.5 lakh.

4. Utilise Section 80C fully:
By investing in instruments like life insurance plans (term plans or ULIPs) ELSS, PPF, EPF, or paying tuition fees and life insurance premiums, you can reduce taxable income by up to Rs. 1.5 lakh.

5. Rebate under Section 87A:
If your taxable income (after deductions) is up to Rs. 5 lakh in the old regime, you get a rebate of Rs. 12,500. In the new regime, this increases to Rs. 25,000 for incomes up to Rs. 7 lakh.

6. Health insurance premium (Section 80D):
Deduct up to:

  • Rs. 25,000 for self and family (below 60 years)

  • Rs. 50,000 for senior citizen parents

Smart tax planning goes beyond choosing a regime it’s about actively using deductions, rebates, and tax-saving investments to optimise every rupee of your income.

How to pay no income tax on Rs. 9 lakh salary?

Believe it or not, it’s possible to reduce your tax liability to zero even if you earn Rs. 9 lakh. The trick lies in using every available deduction and rebate under the old tax regime:

  • Step 1: Claim standard deduction of Rs. 50,000 → income becomes Rs. 8.5 lakh

  • Step 2: Use Section 80C to invest Rs. 1.5 lakh → income drops to Rs. 7 lakh (this can be in life insurance premiums, giving you both tax benefits and family protection)

  • Step 3: Claim Rs. 2 lakh under Section 24(b) for home loan interest → income = Rs. 5 lakh

  • Step 4: Use Section 80D to claim Rs. 25,000 for health insurance → income = Rs. 4.75 lakh

  • Step 5: Contribute Rs. 50,000 to NPS under Section 80CCD(1B) → income = Rs. 4.25 lakh

Final Step: Since your income is now below Rs. 5 lakh, you qualify for Section 87A rebate, and your tax becomes zero.

Pro Tip

Create wealth and meet your financial goals with a ULIP investment plan, start investing from Rs. 3,000/month.

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Conclusion

Earning Rs. 9 lakh annually doesn’t mean you have to pay high taxes. With a bit of tax planning, you can take advantage of standard deductions, home loan benefits, health insurance premiums, and multiple investment-linked exemptions to reduce your taxable income significantly.

Choosing the right tax regime is the first step. Then, by aligning your spending and saving habits with the available deductions under the Income Tax Act, you can lower your overall tax burden—or even bring it down to zero. A comprehensive life insurance policy can be a cornerstone of this strategy—helping you save under Section 80C while ensuring your family’s financial future is protected.

Income Tax Sections & Saving Tips

Section 80C of Income Tax Act

Section 80CCC of Income Tax Act

Taxation

Post office tax saving scheme

What is cess on income tax

Marginal rate of tax

Deferred tax liability

Exempt exempt exempt in income tax

Exemptions under new tax regime

How to save tax for salary above 10 lakh

How to save tax for salary above 20 lakh

How to save tax for salary above 30 lakh

How to save tax for salary above 50 lakh

How to save tax for salary above 9 lakh

How to avoid tax on savings account interest

Frequently asked questions

How much tax should I pay for 9 lakh?
There is not a specific amount of tax you must pay for Rs. 9 lakh. The tax amount you end up paying depends on your chosen tax regime and the various deductions and exemptions you utilise. Hence, it is important that you calculate your tax liability beforehand.
How to avoid tax on 9 lakh salary?
You can avoid paying tax on a Rs. 9 lakh salary by choosing the old tax regime and using all the deductions to bring down your total taxable income to Rs. 5 lakh. That way, you will be eligible for the section 87A rebate, which will allow you to pay zero tax.
Which tax regime is better for 9 lakh CTC?
The old tax regime is better for Rs. 9 lakh CTC as it includes numerous deductions, which can help you bring your tax liability down to zero. The new tax regime contains limited tax deductions, resulting in higher tax liability.
Which tax regime is better for 9.5 lakh salary?
The new tax regime has lower tax rates, which can allow you to pay a lower tax if you do not want to utilise any deductions and exemptions. However, the old tax regime can be beneficial if you can use the deductions, significantly lowering your tax liability.
What are the new income tax slabs proposed in Budget 2024?

The Budget 2024 introduced new income tax slabs under the new tax regime. These changes specifically aim to provide relief to the lower middle class. The new income tax slabs are as follows:

  • Rs. 0 - Rs. 3,00,000: 0%
  • Rs. 3,00,001 - Rs. 7,00,000: 5%
  • Rs. 7,00,001 - Rs. 10,00,000: 10%
  • Rs. 10,00,001 - Rs. 12,00,000: 15%
  • Rs. 12,00,001 - Rs. 15,00,000: 20%
  • Above Rs.15,00,001: 30%

It must be noted that the basic exemption limit remains the same under both old and new tax regimes, set at Rs. 2,50,000 and Rs. 3,00,000, respectively.

What are the existing income tax slabs under the new tax regime?

Before the release of Union Budget 2024, the following income tax slabs were applicable under the new tax regime:

  • Rs. 0 - Rs. 3,00,000: 0%
  • Rs. 3,00,001 - Rs. 6,00,000: 5%
  • Rs. 6,00,001 - Rs. 9,00,000: 10%
  • Rs. 9,00,001 - Rs. 12,00,000: 15%
  • Rs. 12,00,001 - Rs. 15,00,000: 20%
  • Above Rs. 15,00,001: 30%

It is worth mentioning that no changes have been made to the income tax slabs under the old tax regime.

How much tax can I save if my income is Rs. 7.75 lakh under the new tax regime?

Under the new regime, you will have to pay zero tax on a salary income of Rs. 7,75,000. You can claim a standard deduction of Rs. 75,000 (up from the previous limit of Rs. 50,000 in the Union Budget 2024), reducing your taxable income to Rs. 7,00,000. Now, you are eligible to claim a tax rebate of up to Rs. 25,000 under Section 87A. This way, your tax liability will be zero.

How much tax can I save if my income is Rs. 15 lakh under the new tax regime?

Under the new tax regime, you can claim several tax exemptions and deductions, such as a standard deduction of Rs. 75,000 (up from Rs. 50,000), transport allowances (if you’re a specially-abled person), conveyance allowance, daily allowance, interest on home loan for let-out property (Section 24), gifts up to Rs. 50,000, and more. Using them, you can reduce your taxable income and minimise your income tax liability.

How much tax can I save if my income is Rs. 25 lakh or Rs. 30 lakh under the new tax regime?

Under the new regime, you can claim several deductions and exemptions on an income of Rs. 25 lakh or 30 lakh. Some common examples include a standard deduction of Rs. 75,000 (up from Rs. 50,000), transport allowances (if you’re a specially-abled person), conveyance allowance, daily allowance, and gifts up to Rs. 50,000. By claiming these benefits, you can reduce your taxable income and, ultimately, minimise your income tax liability.

Now, assuming you have eligible deductions of Rs. 1,50,000 and Rs. 25,000 under sections 80C and 80D, respectively, on an Rs. 25 lakh income, your income tax liability would be Rs. 4,52,400. However, under the new regime, your tax liability would be Rs. 4,34,200, giving you tax savings of Rs. 18,200.

Similarly, if your income is Rs. 30,00,000, under the old regime, you will pay a tax of Rs. 6,08,400. Under the new regime, your tax liability would be Rs. 5,90,200. Thus, you can again save Rs. 18,200 by opting for the new regime.

How much tax can I save if my income is Rs. 50 lakh or Rs. 1 crore under the new tax regime?

Under the new regime, you can claim several deductions and exemptions on an income of Rs. 50 lakh or Rs. 1 crore. Common examples include the standard deduction of Rs. 75,000, transport allowances (for specially-abled individuals), conveyance allowance, daily allowance, and gifts up to Rs. 50,000.

Assuming you have eligible deductions of Rs. 1,50,000 under Section 80C and Rs. 25,000 under Section 80D on an income of Rs. 50 lakh, your income tax liability under the old regime would be Rs. 12,32,400. However, under the new regime, your tax liability would be Rs. 12,14,200, resulting in tax savings of Rs. 18,200.

Similarly, for an income of Rs. 1 crore, you would pay Rs. 30,71,640 in taxes under the old regime. Under the new regime, your tax liability would be Rs. 30,51,620, giving you savings of Rs. 18,200.

How can I save tax on a Rs. 9 lakh salary?

  • Claim the standard deduction of Rs. 50,000.
  • Utilise Section 24 for home loan interest deductions.
  • Invest in tax-saving options under Section 80C (up to Rs. 1.5 lakh).
  • Claim health insurance premiums under Section 80D.

If you opt for the old tax regime and want to save tax on a Rs. 9 lakh salary, you can start by claiming the standard deduction of Rs. 50,000 (be aware that this limit is Rs. 75,000 under the new regime after changes proposed in the Union Budget 2024). You can deduct the interest paid under Section 24 if you have a home loan.

Additionally, invest in tax-saving options like PPF, ELSS, or NSC under Section 80C, up to Rs. 1.5 lakh. Lastly, claim deductions for health insurance premiums under Section 80D. These steps will help reduce your taxable income and lower your overall tax liability.

What is the standard deduction for salaried individuals in FY 2023-24?

The standard deduction amount varies based on the selected tax regime. In the old regime, you can claim up to Rs. 50,000 as a standard deduction. In the new regime, as updated in the Union Budget 2024, you can claim Rs. 75,000 (an increase from the previous Rs. 50,000).

What is the rebate under Section 87A?

Under Section 87A, the rebate for individuals varies between the old and new tax regimes. In the old regime, those with a taxable income of up to Rs. 5 lakh can claim a maximum rebate of Rs. 12,500. Whereas, in the new regime [applicable for FY 2023-24 (AY 2024-25)], a maximum rebate of Rs. 25,000 can be claimed by individuals with taxable income up to Rs. 7 lakh.

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