Earning over ₹15 lakh a year is a significant milestone. It reflects your hard work, dedication, and the trust your organisation places in you. However, this success brings with it an important responsibility – tax planning. If you don’t plan wisely, a big chunk of your income could go towards taxes. The good news is that India’s tax system offers a variety of ways to reduce your tax liability. In this guide, we will walk you through practical strategies and real-life scenarios to help you save taxes efficiently for the financial year 2025–26. We will also compare the old and new tax regimes to help you decide what suits you best.
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What are your tax obligations if you earn more than ₹15 lakh annually?
When your income crosses the ₹15 lakh mark, you enter the highest tax brackets in India. Under the old tax regime, any income exceeding ₹10 lakh is taxed at 30%, plus a 4% health and education cess. In contrast, the new tax regime offers lower tax rates but restricts the deductions you can claim.
Lets take an example of Janmesh, a 35-year-old product manager from Bangalore earning ₹16.2 lakh per year as salary, dividend of ₹60,000 and having long term capital gain from sale of shares of ₹ 1.5 lakh.
New vs. old tax regime: Which one works best for those earning more than ₹15 lakh?
Choosing the most beneficial tax regime is the foundation of tax planning. The old regime allows you to claim various deductions and exemptions. On the other hand, the new regime simplifies the process by offering reduced tax rates, but it comes at the cost of foregoing most deductions and exemptions.
If you’re someone like Mr. Janmesh who has structured his salary smartly and claims significant deductions, the old regime will usually result in lower tax outgo. However, if you don’t have many deductions or prefer a hassle-free tax filing experience, the new regime might be better.
Will you get standard deduction, Section 87A benefit if you earn above ₹15 lakh?
Both tax regimes offer a standard deduction, but the amounts differ. In the old regime, it is fixed at ₹50,000 for salaried employees, whereas in the new regime it is ₹75,000. This amount is directly reduced from your gross salary.
Section 87A talks about rebate, which provides tax relief to individuals earning up to ₹12 lakh under the new regime, but does not apply if your income crosses this limit. So, for high-income individuals, this rebate is irrelevant. It becomes crucial to focus on other deductions and exemptions to reduce the taxable income.
How to maximise Section 80C benefits when you earn more than ₹15 lakh
Section 80C is one of the most popular tax-saving tools in India, allowing deductions up to ₹1.5 lakh. High earners can take full advantage of this by investing or spending in eligible options. In Janmesh’s case, he strategically allocates his 80C limit by investing ₹40,000 in ELSS (Equity Linked Saving Scheme) mutual funds, contributing ₹20,000 to a PPF account, and claiming ₹90,000 as principal repayment on his home loan.
Hence, the comprehensive use of 80C not only ensures tax savings but also aligns with his long-term financial goals.
How to claim Section 80D deductions for an income of more than ₹15 lakh
Health insurance premiums are another excellent way to reduce taxable income. Under Section 80D, you can claim up to ₹25,000 for premiums paid for yourself, spouse, and dependent children. If you’re also paying for your parents’ insurance and they are senior citizens, you can claim an additional amount of up to ₹50,000.
In Janmesh’s case, he pays ₹20,000 annually for his family’s health insurance and another ₹40,000 for his parents’ health insurance. That totals to ₹60,000, which is entirely deductible from his gross total income. Apart from saving tax, this also provides much-needed financial security in case of medical emergencies.
What NPS tax benefits can you claim if you earn more than ₹15 lakh?
The National Pension System (NPS) is a powerful yet underused tax-saving option, especially for high earners. You can claim an additional deduction of ₹50,000 under Section 80CCD(1B) over and above the section 80C limit of ₹1.5 lakh . Moreover, your employer’s contribution to NPS is also deductible up to 10% of basic salary under the old regime and up to 14% of basic salary under the new regime.
In Janmesh’s case, he invests ₹50,000 on his own and his employer contributes another ₹75,000. He can maximise this by restructuring his salary so that his employer contributes ₹1.62 lakh. For ease of understanding, we have assumed his total salary as basic salary. This means an additional ₹87,000 as deduction, if he continues to follow the old regime. Under the new regime, this deduction can go up to ₹2.26 lakh (14% of salary). That’s a substantial saving, along with creating a retirement corpus.
Owning property? How to claim home loan deductions smartly for income of over ₹15 lakh
If you have a home loan, don’t miss out on the benefits under Section 24(b). You can claim up to ₹2 lakh per year as a deduction for interest paid on a self-occupied property. The principal portion qualifies under Section 80C.
In Janmesh’s case, he pays around ₹1.8 lakh in annual interest. He can claim the benefit of the same under the old regime and reduce his taxable income significantly.
Capital gains and income from other sources at ₹15 lakh+ salary
High earners often have additional income from sale of shares and dividends. It’s important to understand how these are taxed:
- LTCG (Long-term capital gains) on sale of shares above ₹1.25 lakh/year is taxed at 12.5%.
- STCG (Short-term capital gains) on sale of shares is taxed at 20%.
- Dividend Income is taxed as per applicable slab rate.
In Janmesh’s case, he earned ₹60,000 in dividends and ₹150,000 as long term capital gain from sale of shares.
Getting a salary of more than ₹15 lakh? CTC vs in-hand salary & tax implications
Many professionals focus on their CTC without understanding what actually hits their bank account. For example, Janmesh’s CTC is ₹16.2 lakh, but after accounting for capital gains, provident fund, insurance, taxes, and deductions, his monthly in-hand is around ₹92,000 under the old regime. However, because of thoughtful tax planning, he manages to save nearly ₹62,681 annually in taxes by opting out of the old regime, which boosts his net effective income.
| Particulars | Old Regime (₹) | New Regime (₹) |
| Basic Salary | 1,620,000 | 1,620,000 |
| Standard Deduction | -50,000 | -75,000 |
| House Property Income | -180,000 | – |
| Capital Gains | 150,000 | 150,000 |
| Other Income | 60,000 | 60,000 |
| Deductions under Chapter VI A | ||
| – Section 80C | -150,000 | – |
| – Section 80CCD(1B) | -50,000 | – |
| – Section 80CCD(2) | -75,000 | -226,800 |
| – Section 80D | -60,000 | – |
| Total Taxable Income | 1,265,000 | 1,528,200 |
| Tax Payable | 156,130 | 93,449 |
| – On Normal Income | 147,000 | 86,730 |
| – On Special Income | 3,125 | 3,125 |
| – Health & Education Cess | 6,005 | 3,594 |
| Savings in Tax | – | 62,681 |
| Net Cash in Hand | 1,108,870 | 1,434,751 |
| Monthly Cash in Hand | 92,406 | 119,563 |
Reaching a salary level of ₹15 lakh or more is commendable, but managing your finances wisely is what sets you apart. Taxes are inevitable, but they are also manageable. Whether it’s through structuring your salary, making the right investments, or choosing the appropriate tax regime, every bit of planning helps you keep more of what you earn.
Start early, plan monthly, and stay updated on tax laws. Tax planning isn’t just about saving money—it’s about achieving peace of mind, building wealth, and securing your financial future.
