What is the income tax on a salary of Rs. 13.5 lakhs per annum? How to distribute/salary structure for a 13.5 lakhs salary for a maximum tax benefit in India ?

The standard deduction for salaried individuals for the financial year 2022-23 is Rs. 50,000. The standard deduction can be claimed by an individual irrespective of the expenses incurred.

So, if we consider the standard deduction of Rs. 50,000, the taxable income will be reduced to Rs. 13 lakhs (Rs. 13.5 lakhs - Rs. 50,000).

The income tax on a salary of Rs. 13 lakhs per annum would be:

• Up to Rs. 2.5 lakhs: No tax
• From Rs. 2.5 lakhs to Rs. 5 lakhs: No tax
• From Rs. 5 lakhs to Rs. 10 lakhs: Rs. 12,500 + 20% of (Rs. 10 lakhs - Rs. 5 lakhs) = Rs. 62,500
• Above Rs. 10 lakhs: Rs. 1,12,500 + 30% of (Rs. 13 lakhs - Rs. 10 lakhs) = Rs. 1,22,000

Therefore, the total income tax payable on a salary of Rs. 13.5 lakhs per annum after claiming the standard deduction of Rs. 50,000 would be Rs. 1,84,000.

Claiming the standard deduction of Rs. 50,000 can help reduce the taxable income and, in turn, lower the income tax liability.

To get maximum tax benefit in India, here are some ways you can consider:

Invest in tax-saving schemes: There are various tax-saving investment options available under Section 80C of the Income Tax Act, such as Public Provident Fund (PPF), National Pension System (NPS), Equity Linked Savings Scheme (ELSS), etc. These investments can help you claim tax deductions of up to Rs. 1.5 lakhs per annum.

Claim deductions for medical expenses: You can claim deductions for medical expenses under Section 80D of the Income Tax Act. You can claim up to Rs. 25,000 per annum for medical insurance premium paid for yourself, your spouse, and dependent children. Additionally, you can also claim up to Rs. 50,000 per annum for medical insurance premium paid for your parents who are senior citizens.

Claim deductions for home loan: If you have taken a home loan, you can claim deductions under Section 80C for the principal repayment and under Section 24 for the interest payment. The maximum deduction for the interest payment is Rs. 2 lakhs per annum.

Claim deductions for rent paid: If you are living in a rented house, you can claim deductions under Section 80GG for the rent paid. The maximum deduction is Rs. 60,000 per annum.

Claim deductions for education loan: If you have taken an education loan for yourself, your spouse, or your children, you can claim deductions for the interest payment under Section 80E of the Income Tax Act. There is no upper limit for this deduction, and you can claim it for a maximum of 8 years.

Claim deductions for donations: You can claim deductions under Section 80G for the donations made to charitable institutions. The deduction amount varies depending on the institution and can range from 50% to 100% of the donated amount.

Note: It's essential to consult with a tax professional before making any investment or tax-saving decisions.