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How To Save Tax For Salary Above 30 Lakhs?

By Ektha Surana


Updated on: Apr 5th, 2024


31 min read

High-income individuals, especially those who belong to the above 30 lakh tax slab, have to bear a heavy tax burden. However, there are various ways in which the tax liability can be reduced to some extent. 

So, if you earn Rs 30 lakh yearly and are looking for ways how to save tax for a salary above 30 lakhs, give this article a read. It covers everything how you can save taxes by availing the deductions available under various sections of the Income-tax Act, 1961. 

Income Tax Slabs Under Old Income Tax Regime vs New Income Tax Regime:

The tax slabs under the new vs old tax regime are:

Tax Slab

FY 2023-24 Tax Rate (Old tax regime)

Tax Slab

FY 2023-24 Tax Rate (New tax regime)

Up to Rs 2,50,000


Up to Rs 3,00,000


Rs 2,50,000 – Rs 5,00,000


Rs 3,00,000 – Rs 6,00,000


Rs 5,00,000 – Rs 10,00,000


Rs 6,00,000 – Rs 9,00,000


Rs 10,00,000 and beyond


Rs 9,00,000 – Rs 12,00,000




Rs 12,00,000 – Rs 15,00,000




Rs 15,00,000 and beyond


Note: The tax slabs under the new regime have been revised in Budget 2023, there have been no changes made in budget 2024.

To calculate your tax liability in both regimes, you can use old vs new tax regime calculator. 

Please note that you will not receive any deductions under the new regime. The tax benefits you will read in this article will only be applicable if you file under the old regime.  

Ways to Save Tax on 30 Lakhs Salary

When you are tax planning for a salary above 30 lakhs, you need to know the following: 

  • Salary (-) Exemptions = Taxable Salary Income
  • Taxable Salary Income (-) Deductions = Net taxable income. 

Therefore, you can maximize tax savings through the following exemptions and deductions:

Part 1- Exemptions

You can find out your salary structure from the CTC. It generally looks like this:

Salary Component




Dearness Allowance 


House Rent Allowance (HRA)

Exempt up to a certain limit. Calculate now

Leave Travel Allowance (LTA)

Actual travel ticket expenses are exempt for 2 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 Allowance

Rs  4800 per child (max 2 children)


Rs  50 per meal (max 2 meals a day)Annual= Rs  31,200 (50*2*26 days*12 months)

Standard Deduction

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

Professional Tax

Generally Rs 2,400 (Varies from state to state)

Part 2- Deductions

When you are tax planning for a salary above 30 lakhs, you can get deductions on the following:

Paying health insurance policy 


(Section 80D)

Self, your spouse, and your dependent children: 

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

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)

Example of Calculation of Tax Under New and Old Tax Regimes

Let’s take an example for better understanding: 

Example: Mr A has a Salary income of Rs. 30 lakhs. He is also claiming the following deduction and exemption. Calculate tax liability under the Old Tax Regime and New Tax Regime

  1. HRA exemption = Rs 1,60,000
  2. LTA exemption = Rs. 55,000
  3. Children's Education and Hostel Allowance =Rs. 9,600
  4. Profession Tax = Rs. 2,400
  5. Investment in PPF, ELSS = Rs. 1,50,000
  6. Medical insurance premium towards Parents = Rs. 50,000
  7. Interest on education loan = Rs. 25,000


Old tax regime

New tax regime

Gross Salary u/s 17(1)



Less: Exemption u/s 10


HRA Exemption


LTA Exemption




Children's education and hostel allowance


Less: Deduction u/s 16


Standard deduction



Profession Tax


Income under the Head Salary



Less: Deduction under Chapter VI-A


Section 80C


Section 80D


Section 80E


Net Total Income



Income Tax



Less: Rebate u/s 87A



Tax Liability (Including Cess)



As per the above computation the Old Tax Regime is more beneficial by Rs. 24,024. This is because of the claim of deduction and exemption under the Old Tax Regime, which is not available in the New Tax Regime.

Note: In the case of the Old Tax Regime, 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)
  • 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)
  • Term plan insurance- Rs 12,000 premium (Around Rs 1 Crore cover)
  • ULIP or endowment plant- Rs 12,000 premium.

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 15 lakhs?

How To Save Tax For Salary Above 20 Lakhs?

How To Save Tax For Salary Above 50 Lakhs?

How to Save Tax For Salary Above 1 crore?

Frequently Asked Questions

How to claim a tax rebate under section 87A?

While filing your income tax return, if your taxable income is less than Rs.5,00,000 after incorporating all the applicable deductions and exemptions,  you can receive a tax rebate of up to Rs.12,500 under the old regime and Rs.25,000 in case of the new regime when taxable income is less than Rs 700,000.

What tax deductions do Agniveers get under section 80CCH?

Agniveers who work in the Indian Armed Forces can claim a deduction equal to the amount they deposit in the Agniveer Corpus Fund once they get enrolled in the Agnipath Scheme.

How is the house rent allowance calculated?

You can claim the entire house rent allowance or your rent if it is less than 10% of the basic salary and DA. If you reside in a non-metro city, you can claim 40% of your salary (Basic+DA) and 50% of your salary (Basic+DA) if you stay in a metro city. 

What is the maximum tax benefit you can claim under children's allowance?

You can claim a maximum tax exemption of Rs.1,200 per year on children allowance offered by your employer. However, this is allowed for a maximum of two children.

Which tax regime is better for 30 lakhs income?

This requires comparative analysis, which is based on your Salary Income, Exemption and deductions applicable to you. You can use our tax calculator and check which is the best option.

About the Author

Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more


Quick Summary

Individuals earning above 30 lakh face a heavy tax burden, but ways to reduce it exist. Deductions under Income Tax Act help save tax. Old vs new tax regime compared in detail. Various exemptions and deductions available like HRA, EPF, health insurance, charity donations, home loan payments, etc. Example provided on calculating tax liability under both regimes. Investments like EPF, ULIPs, education fees can be considered to maximize savings.

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