Earning ₹15 lakhs per year is a great milestone in your career—but it also puts you in the higher tax bracket. The good news is, the Income Tax Act provides several legal ways to reduce your tax liability. With the right planning, you can save a significant amount every year.
In this blog, we’ll explore how individuals with ₹15 LPA income can reduce their tax burden under both the Old and New Tax Regimes.
Old vs. New Tax Regime: Which One Works Better?
Since FY 2020–21, taxpayers can choose between two regimes:
– Old Regime – Higher tax rates but multiple exemptions and deductions (HRA, 80C, 80D, home loan, etc.).
– New Regime – Lower tax rates but very few deductions allowed.
The right choice depends on your lifestyle, investments, and financial goals.
1. How to Save Tax Under the Old Regime
If you’re someone who invests or pays for insurance, rent, or loans, the old regime is usually more beneficial.
✅ Deductions You Can Claim:
- Standard Deduction – ₹50,000 (for salaried individuals).
- Section 80C (₹1.5 lakh) – Investments like PPF, ELSS, Life Insurance, EPF, Sukanya Samriddhi, Home Loan Principal.
- Section 80D (Health Insurance) – Up to ₹25,000 for family + ₹25,000/₹50,000 for parents.
- Home Loan Interest (Section 24b) – Up to ₹2 lakh.
- NPS (Section 80CCD(1B)) – Extra deduction of ₹50,000.
- HRA (House Rent Allowance) – If you live in rented accommodation.
- Education Loan (80E) – Entire interest amount deductible (if applicable).
- Donations (80G) – For approved charities.
2. How to Save Tax Under the New Regime
The new regime offers simplified slabs but fewer deductions. It works best if you don’t make large tax-saving investments.
✅ Available Benefits:
- Standard Deduction – ₹75,000 for salaried and pensioners.
- Employer’s NPS Contribution (80CCD(2)) – Deductible up to 10% of salary (14% for govt employees).
- Employer’s EPF / Superannuation Contributions – Exempt up to ₹7.5 lakh (combined).
- Retirement Benefits – Gratuity, leave encashment, and other allowances remain tax-free up to limits.
Final Tips to Reduce Tax on 15 LPA Salary
- Always compare both regimes before filing your return.
- Use NPS and PF for tax-saving + retirement planning.
- Buy medical insurance—it reduces tax and secures your health.
- If possible, take a home loan to enjoy both interest and principal deductions.
- Start investing early in the year instead of waiting until March.
Conclusion
If you are earning ₹15 LPA, you don’t have to lose a big chunk to taxes. With smart financial planning, you can legally save lakhs every year.
– Choose the Old Regime if you actively invest and have home loans or insurance.
– Choose the New Regime if you prefer simplicity and don’t claim many deductions.
At the end of the day, the best choice depends on your financial situation. But one thing is certain: early tax planning is the smartest way to maximize your savings.
