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How To Save Tax For Salary Above 15 Lakhs?

By CA Mohammed S Chokhawala

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Updated on: May 8th, 2025

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13 min read

People in the high-income bracket of salary above Rs 15 lakh often look for tax saving measures so they can pay the least in taxes. The Income Tax Act offers various opportunities for taxpayers to avail of deductions and decrease their tax obligations. With efficient tax planning, you can save significant amounts of taxes. 

Here’s how you can save tax on Rs 15 lakh annual salary. 

HOW TO SAVE TAXES 15L

Slab Rates Applicable For Financial Year 2025-2026

The modified slab rates for new tax regime applicable for FY 2025-2026 is as follows:

Income Tax SlabsTax Rate
Upto Rs. 4 lakhsNIL
Rs. 4 lakhs - Rs. 8 lakhs5%
Rs. 8 lakhs - Rs. 12 lakhs10%
Rs. 12 lakhs - Rs. 16 lakhs15%
Rs. 16 lakhs - Rs. 20 lakhs 20%
Rs. 20 lakhs - Rs. 24 lakhs25%
Above Rs. 24 lakhs30%

Slab Rates Applicable for Financial Year 2024-2025:

As per the latest Finance Act 2024, changes have been made in the slab rate for the new tax regime applicable for FY 24-25 as follows - 

Tax Slab Tax Rate
Upto ₹ 3 lakhNil
₹ 3 lakh - ₹ 7 lakh5%
₹ 7 lakh - ₹ 10 lakh10%
₹ 10 lakh - ₹ 12 lakh 15%
₹ 12 lakh - ₹ 15 lakh20%
more than ₹ 15 lakh30%

In the new tax regime, the standard deduction has been increased from Rs.50,000 to Rs.75,000, and the deduction on family pension has also been increased from Rs.15,000 to Rs.25,000. 

Tax Slabs Under Old vs New Regime

The old regime allows for several deductions that are not available in the new one. However, the tax rates under the new regime are lower than that of the old tax regime. 

You can also use the old vs new tax regime calculator for better understanding. 

Tax SlabFY 2024-25 Tax Rate (Old tax regime)Tax SlabFY 2024-25 Tax Rate (New tax regime)
Up to Rs 2,50,000NilUp to Rs 3,00,000Nil
Rs 2,50,000 – Rs 5,00,0005%Rs 3,00,000 – Rs 7,00,0005%
Rs 5,00,000 – Rs 10,00,00020%Rs 7,00,000 – Rs 10,00,00010%
Rs 10,00,000 and beyond30%Rs 10,00,000 – Rs 12,00,00015%
NANARs 12,00,000 – Rs 15,00,00020%
NANARs 15,00,000 and beyond30%

Above tax slabs under the old tax regime are applicable to those individuals aged less than 60 years. For individuals aged between 60 and 80 years basic exemption is Rs 3,00,000 and for individuals aged over 80 years, the basic exemption is Rs 5,00,000. The tax slab under the new tax regime is the same for all individuals.

Deductions Available For Salary Above 15 lakhs

Your salary structure contains several components that are exempted from taxation. The net taxable income is calculated on your salary in the following ways:

ParticularAmount
Salary under section 17(1)XXXXX
Less: Exemption u/s 10 (HRA, LTA etc.)XXXXX
Less: Deduction u/s 16 (Standard deduction)XXXXX
Total IncomeXXXXX
Less: Deduction under sections 80C,80D etc XXXXX
Net Total IncomeXXXXX

Deductions & Exemptions mUnder The New Tax Regime

Following deductions are available under the new tax regime if you have a salary of more than 15 lakhs;

  • Standard deduction up to Rs 75,000 (For Salaried employees).
  • Section 80CCD(2) - Employer contribution to NPS.
  • Section 80 CCH - Investment made in Agniveer Corpus.
  • Section 57(iia) - Family Pension received.
  • Exemption on voluntary retirement 10(10C), gratuity u/s 10(10) and Leave encashment u/s 10(10AA).
  • Interest on Home Loan on the let-out property (Section 24).
  • Transport allowances in case of a specially-abled person. 
  • Conveyance allowance received to meet the conveyance expenditure incurred as part of the employment. 
  • Any compensation received to meet the cost of travel on tour or transfer. 

Deductions & Exemptions Under Old Tax Regime

So, if you belong to the above 15 lakh tax slab, you can avail of tax deductions from the following.

1. Exemptions

You can find out your salary structure from the CTC, which generally looks like:

Salary ComponentTaxability
Basic Fully-taxable
Dearness Allowance Fully-taxable
House Rent Allowance (HRA)Exempt up to a certain limit. Calculate now
Leave Travel Allowance (LTA)Actual travel ticket expenses are exempt for two trips in 4 years under 10(5). Read more
Mobile/ Internet reimbursement Exempt if:
– used predominantly for office purposes 
– proofs/bills submitted
Children's Education and Hostel AllowanceRs  4800 per child (max 2 children)
FoodRs 50 per meal (max 2 meals a day)
Annual = Rs 26,400 (50*2*22 days*12 months)
Professional TaxGenerally Rs 2,400 (Varies from state to state)

2. Deductions

You can get deductions on the following when you are tax planning for salary above 15 lakhs:

Paying health insurance policy premium (Section 80D)

Self, your spouse, and your dependent children: 

Rs 25,000 

Parents: Rs 25,000 (Rs 50,000 if aged 60 and above)

Opting for an education loan (Section 80E)

Interest deduction for 8 years from the year of repayment of loan taken for the higher education of yourself, your spouse, dependent children, or a student of whom you are the legal guardian.

Donating to charity (Section 80G)

50% or 100% of the eligible amount.

Investing in tax saving instruments (Section 80C)

Tax benefit of Rs.1,50,000 per year. You can invest in the 

following options:

– Employees’ Provident Fund (EPF)

– Public Provident Fund (PPF)

– 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

Costs to treat disabled dependents (Section 80DD)

If you have disabled dependents for whom you bear 

medical expenses, you are eligible for the tax relief: 

– 40% disability: Rs.75,000

– Severe or 80% disability: Rs.1,25,000

Deductions on home loan payments

Principal amount: Upto Rs 1.5 lakhs u/s 80C

Interest amount: Upto Rs 2 lakhs paid u/s 24b  

The maturity amount of a Life Insurance Policy

Maturity proceeds are tax-exempt if the sum assured is ≤:

– 20%: policies issued before 1 April 2012

– 10%: policies issued after 1 April 2012

– 15%: policies issued after 1 April 2013 for a person with disability or disease.

 

Standard Deduction

Rs 50,000 (Will be given to all without any restrictions)

Note: You might not always have a home loan or be interested in the investment plans listed under Section 80C. However, you may consider these investments to make use of the entire Rs 1.5 lakh limit under 80C:  

  • ELSS mutual funds- Rs 60,000 (Investment: Rs 500 per month SIP, Returns- 12% CAGR, Lock-in-period: 3 years)
  • Term plan insurance- Rs 12,000 premium (Around Rs 1 Crore cover)
  • ULIP or endowment plan - Rs 12,000 premium
  • Children’s Education fees: (Rs 25,000 to Rs 1 lakh) 
  • EPF: Around Rs 30,000 – Rs 72,000, i.e., 12% of your basic + DA (contribution already made by your employer)

How to Save Taxes for an Income of Rs 15 Lakh?

The following tax saving options are available for both old and new regime.

Employer’s Contribution to NPS u/s 80CCD(2)

  • Section 80CCD(2) allows deduction for contribution made by employer in National Pension Scheme (NPS). 
  • Deduction is available under both new regime for this amount, though the limit for deduction differs according to choice of regime. 

The following table describes the quantum of deduction available under both the regimes for contributions made by the employer in the NPS scheme under section 80CCD (2)

ParticularsCentral / State Government EmployerOther Employer
Old Regime14% of salary (basic + DA)10% of salary (basic + DA)
New Regime14% of salary (basic + DA)14% of salary (basic + DA)

Gift Taxation

  • Gifts received either in cash or through kind if the amount or the value of the gift received is up to Rs.50,000 is not taxable under section 56 of the Income Tax Act. 
  • If the amount received or the monetary value of the gift received in kind exceeds Rs.50,000, then entire amount is taxable. 
  • This tax saving option is available for both old and new tax regimes.

Deduction for Interest on Borrowing for Let Out Property

  • If the assessee has rented out his property (residential or commercial building), deduction under section 24 can be availed. 
  • The amount of interest paid for amount borrowed for purchase or construction of immovable property can be allowed as a deduction. 
  • There is no maximum limit fixed for claiming this deduction. 

Gratuity and Leave Encashment

  • Exemption is available for the amount received as gratuity and leave encashment at the end of the employment tenure. The employee may either retire or terminate the employment before retirement. 
  • The Income Tax Act provides the maximum amount eligible for deduction for both gratuity and leave encashment
  • This exemption is equally available for both old and new tax regimes.

Deduction on Additional Employee Cost

Deduction under section 80JJA is available irrespective of choice of regime of the assessee. 30% of the amount expended on additional employees can be allowed as a deduction.  

Deduction on Agniveer Corpus Fund

  • Contribution made by the Central Government in Agniveer Corpus Fund of the assessee is allowed as a deduction under section 80CCH(2). 
  • Individuals enrolled in the Agnipath Scheme for the armed forces are eligible to claim this deduction.
  • There is no maximum limit for deduction under this section. The entire amount contributed by Central Government can be allowed as a deduction
  • This deduction is also available under both old and new regimes.

Calculating Tax Under Old And New Tax Regimes

Ms Maya has a salary income of Rs. 15 lakhs. She can claim an HRA exemption of Rs. 1 lakh, an LTA exemption of Rs. 20,000 and a Children's education and hostel allowance of Rs. 9,600. Profession tax of Rs 2,400 was deducted from her payslip. She has invested Rs. 1.5 lakhs in PPF and made a voluntary contribution to NPS of Rs 50,000. She has paid a medical insurance premium of Rs. 25,000 for her own family. Tax calculation under the new and old tax regime will be as follows. 

For FY 2025-26 the tax liability of Mr. A will be calculated as follows under the old and new tax regime:

ParticularOld tax regime (FY 2025-26)New tax regime (FY 2025-26)
Gross Salary u/s 17(1)15,00,00015,00,000
Less: Exemption u/s 10  
HRA Exemption1,00,000NA
LTA Exemption20,000NA
Children's education and hostel allowance (for 2 children)9,600NA
Less: Deduction u/s 16  
Standard deduction50,00075,000
Profession Tax2,400NA
Income under the Head Salary13,18,00014,25,000
Less: Deduction under Chapter VI-A  
Section 80C - PPF/LIC/ELSS1,50,000NA
Section 80CCD(1B) - NPS50,000NA
Section 80D - Medical insurance25,000NA
Net Total Income10,93,00014,25,000
Tax Liability (Including Cess)1,46,01697,500

By opting to pay tax under the old tax regime, for FY 2025-26 the taxpayer will be able to save Rs. 48,516 in taxes.

For FY 2024-25 the tax liability of Mr. A will be calculated as follows under the old and new tax regime:

ParticularOld tax regime (FY 2024-25)New tax regime (FY 2024-25)
Gross Salary u/s 17(1)15,00,00015,00,000
Less: Exemption u/s 10  
HRA Exemption1,00,000NA
LTA Exemption20,000NA
Children's education and hostel allowance (for 2 children)9,600NA
Less: Deduction u/s 16  
Standard deduction50,00075,000
Profession Tax2,400NA
Income under the Head Salary13,18,00014,25,000
Less: Deduction under Chapter VI-A  
Section 80C - PPF/LIC/ELSS1,50,000NA
Section 80CCD(1B) - NPS50,000NA
Section 80D - Medical insurance25,000NA
Net Total Income10,93,00014,25,000
Tax Liability (Including Cess)1,46,0161,30,000

Now, according to the new tax regime, your payable tax amount will be Rs 1,30,000 which is more beneficial in comparison to the old regime. In the above scenario, the tax liability to be paid by the taxpayer, including cess, differs as per the deductions and exemptions allowed under both regimes. Choosing the tax regime by an individual should be done keeping in mind the investments made and the deductions that can be claimed for the same. 

Related Articles:

How To Save Tax For Salary Above 7 Lakhs? 
How To Save Tax For Salary Above 10 Lakhs? 
How To Save Tax For Salary Above 12 Lakhs? 
How To Save Tax For Salary Above 13 Lakhs? 
How To Save Tax For Salary Above 20 Lakhs? 
How To Save Tax For Salary Above 30 Lakhs? 
How To Save Tax For Salary Above 50 Lakhs? 
How To Save Tax For Salary Above 1 Crore?

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Frequently Asked Questions

Which tax regime is better for a 15 lakh salary?

The selection of the best tax regime depends upon the exemption and deduction that is applicable in your case. Careful comparison must be made to analyse the best option for you. You can check out our tax calculator to determine the best option for you.

Can I pay zero tax on 15 lakh salary?

Deductions and exemptions allowed under the old and new tax regime will help you understand if you can pay zero tax on 15 lakh salary.

Are there any restrictions on contributions to Provident Funds (PF) and Voluntary Provident Funds (VPF) for individuals earning salaries exceeding 15 lakhs?

While there are statutory limits on Employee Provident Fund (EPF) contributions, individuals have the option to contribute a higher percentage of their salary to VPF, thereby enhancing both savings and tax benefits.

What are the key tax-saving deductions available for individuals earning above Rs. 15 lakhs?

Key deductions include those under Section 80C (for investments like PPF, LIC, ELSS), Section 80D (for medical insurance premiums), Section 80E (for education loan interest), and Section 80G (for donations to charity). Additionally, deductions like standard deduction, HRA, and LTA are also applicable based on eligibility.

How to avoid taxes on salary abover 15 Lakhs?

By understanding the difference between the new and old tax regime, the different exemptions and deductions available under the same, tax payable can be reduced. 

About the Author

I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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