4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

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Scripbox » Tax » How to Save Tax for a Salary of 20 Lakhs?

How to Save Tax for a Salary of 20 Lakhs?
By Sannihitha Ponaka
Updated on 2 Mar, 2023

Income Tax Slabs Under the Old Income Tax Regime and New Income Tax Regime
Old Tax Regime
ncome Tax Slab Tax Rate
Up to ₹ 2,50,000 Nil
2,50,001 – ₹5,00,000 5%
5,00,001 – ₹10,00,000 20%
Above ₹10,00,000 30%

New Tax Regime (FY 20-21, FY 21-22 & FY 22-23)

ncome Tax Slab Tax Rate
Up to ₹2,50,000
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4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

SaveInTax
this– ₹Rules
2,50,001 & Sections Meaning & Definition Income Tax Guides5%
article
5,00,000
5,00,001 – ₹7,50,000 10%
7,50,001 – ₹10,00,000 15%
10,00,001 – ₹12,50,000 20%
12,50,001 – ₹15,00,000 25%
Above ₹15,00,000 30%

New Tax Regime ( From FY 23-24)

ncome Tax Slab Tax Rate
Up to ₹3,00,000 Nil
3,00,001 – ₹6,00,000 5%
6,00,001 – ₹9,00,000 10%
9,00,001 – ₹12,00,000 15%
12,00,001 – ₹15,00,000 20%
Above ₹15,00,000 30%

Check Current Income Slabs and Tax Rates in 2023

How to Pay Zero Tax on a 20 Lakh Salary?

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4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

SavesInTax
Let’ this Rules
take & Sections
anarticle
example Meaning & Definition
to understand the taxationIncome
of INRTax20Guides
lakh salary under old and new
tax regime, and see which one is more beneficial. Mr Rudrav earns a gross salary of INR
20,00,000. The following tables show Mr Rudrav’s tax liability under the old and new tax
regime.
Old Tax Regime
Gross Salary (A) ₹ 20,00,000
Less (Exemptions)
HRA ₹ 1,50,000
LTA ₹ 40,000
Reimbursements (Food + Mobile/ Internet) ₹ 24,000
Children’s Education & Hostel Allowance ₹ 9,600
Standard Deduction ₹ 50,000
Professional Tax ₹ 2,400
Total Exemptions (B) ₹ 2,76,000
Less (Deductions)
80C ₹ 1,50,000
80D ₹ 50,000
80E ₹ 25,000
80CCD (1B) ₹ 50,000
Section 24b ₹ 2,00,000
Total Deductions (C ) creation insights for you.
Practical wealth Subscribe ₹ 4,75,000
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4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

SaveTaxable
Net InTaxthis Income
Rules
article& Sections
(A-B-C) Meaning & Definition Income Tax Guides ₹ 12,49,000
Up to ₹2,50,000 (Nil) ₹ 0
₹ 2,50,001 – ₹5,00,000 (5%) ₹ 12,500
₹ 5,00,001 – ₹10,00,000 (20%) ₹ 100,000
Above ₹10,00,000 (30%) ₹ 74,700
Total Tax Payable ₹ 1,87,200

New Tax Regime (FY 20-21, FY 21-22 & FY 22-23)

Gross Salary (A) ₹ 20,00,000
Total Exemptions (B) ₹ 0
Total Deductions (C ) ₹ 0
Net Taxable Income (A-B-C) ₹ 20,00,000
Up to ₹2,50,000 (Nil) 0
₹ 2,50,001 – ₹5,00,000 (5%) ₹ 12,500
₹ 5,00,001 – ₹7,50,000 (10%) ₹ 25,000
₹ 7,50,001 – ₹10,00,000 (15%) ₹ 37,500
₹ 10,00,001 – ₹12,50,000 (20%) ₹ 50,000
₹ 12,50,001 – ₹15,00,000 (25%) ₹ 62,500
Above ₹15,00,000 (30%) ₹ 1,50,000
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4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

SaveInTax
Total Tax
this Rules
article& Sections Meaning & Definition Income Tax Guides ₹3,37,500
Payable

New Tax Regime (From FY 23-24)

Gross Salary (A) ₹ 20,00,000
Less (Exemptions)
Standard Deduction ₹ 50,000
Total Exemptions (B) ₹ 50,000
Total Deductions (C) ₹ 0
Net Taxable Income (A-B-C) ₹ 19,50,000
Up to ₹3,00,000 (Nil) ₹ 0
₹ 3,00,001 – ₹6,00,000 (5%) ₹ 15,000
₹ 6,00,001 – ₹9,00,000 (10%) ₹ 30,000
₹ 9,00,001 – ₹12,00,000 (15%) ₹ 45,000
₹ 12,00,001 – ₹15,00,000 (20%) ₹ 60,000
Above ₹15,00,000 (30%) ₹ 1,35,000
Total Tax Payable ₹ 2,85,000

From the above example, under the old regime, Mr Rudrav is liable to pay a tax of INR
1,87,200. Under the new regime, he will have to pay INR 3,37,500 till FY 22-23 and from FY
23-24, the net tax payable will be INR 2,85,000.
For Different
PracticalIncome Slabs insights for you. Subscribe
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4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

SaveInIncome
Tax
this Rules
Tax&onSections
article Meaning & Definition Income Tax Guides
7 Lakh Salary
Income Tax on 10 Lakh Salary
Income Tax on 12 Lakh Salary
Income Tax on 15 Lakh Salary

Frequently Asked Questions

How much tax should I pay for 15 lakhs?

You can pay zero tax on a salary of 15 lakhs, provided you have invested in tax savings
options and claim applicable deductions and exemptions. Under the old regime, your net
tax payable can be zero if you claim exemptions and invest in tax-saving schemes. In
case you are following the new tax regime for FY 20-21, FY 21-22 & FY 22-23 the net
tax payable amount will be INR 3,37,500. For FY 23-24 onwards, the net tax payable will
be INR 2,85,000 (from the above example).
How to pay zero tax for income up to 10 lakhs?
Can you save 100% on tax?
How much income is tax-free according to the Income Tax Act?

RELATED READS
How to Save Maximum from Income Tax
New Vs Old Tax Regime – Which is Best?
What is Section 80 C of Income Tax
Best Tax Saving Investments
Best ELSS Mutual Funds 2023

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4/10/23, 10:31 PM How to Pay Zero Income Tax on 20 Lakhs Salary

SavePosted on 1 &Mar,
InTaxthis Rules
article 2023 Meaning & Definition Income Tax Guides
Sections
Last updated March 2, 2023

Sannihitha Ponaka
Sannihitha Ponaka is an MBA graduate from Symbiosis and has more than 5 years of
experience in the financial sector. Following her dreams in the field of finance, she
leverages writing to communicate the importance of investing. Your go-to guide to
creating amazing and easily understood investment content. Her forte lies in
investment advisory and strategy with expertise in fundamental analysis and
research.
See all articles by Sannihitha Ponaka

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