How to pay no Income tax despite earning Rs. 7.25 Lacs a year?

How to do your tax planning?

If you are someone who earns Rs. 60,000/- a month, do the following to ensure that you need not pay any tax.

1. Make sure to have deductions under Section 80C at least up to Rs. 150,000. This may consist of deduction made by employer towards Provident fund contribution, Life insurance premium, Principal repayment of housing loan, Investment in PPF (Public provident fund) or maybe education fees of children. These are the most commonly taken options.

2. An additional amount of Rs. 50,000/- is allowed as a deduction for investment in National pension scheme. You can approach your bank for more information on the same.

3. Taking medical insurance of your family is extremely important as a precautionary measure. Additionally, as a tax incentive a deduction up to Rs. 25,000/- is allowed against payment of medical insurance premium provided such payment is made by a mode other than cash.

The following table makes it very easy to understand the above

So on a total income of Rs. 725000, the resident individual need not pay any tax, if he invests as above, which an average individual will definitely do.

Disclaimer: This write up is not intended to be a professional advice to anyone, therefore neither the Author nor the Organization he represents accepts any responsibility whatsoever and hence no liability can arise for any losses, claims or due to the contents of this write up. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. The opinion is the personal opinion of the author and the firm P P Jayaraman & Co will not in any way be responsible for any claim etc.