“Income Under the Lens: Navigating Deductions, Slabs, and Savings”
Introduction
In today’s financially aware world, understanding income tax is more than a legal obligation—it’s a smart financial habit. For many, however, tax season brings anxiety, confusion, and last-minute rushes. “Income Under the Lens” offers a clear roadmap to understand how income tax works in India, how deductions and slabs affect your net tax, and how smart saving strategies can reduce your taxable income and maximize your wealth.
Understanding Income Tax in India
Income tax is a direct tax levied by the Government of India on individuals and entities based on their income. It applies to:
-
Salaried individuals
-
Self-employed professionals
-
Businesses
-
Freelancers
-
NRIs earning income in India
Taxpayers are classified as:
-
Individuals (below 60), Senior Citizens (60–80), and Super Senior Citizens (80+)
-
Residents and Non-Residents
Income Tax Slabs: Old vs New Regime
India currently offers two tax regimes:
✅ Old Regime (With Deductions):
| Income Slab | Tax Rate |
|---|---|
| Up to ₹2.5 lakh | Nil |
| ₹2.5 lakh – ₹5 lakh | 5% |
| ₹5 lakh – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
➡️ Allows deductions under Sections 80C, 80D, HRA, LTA, etc.
✅ New Regime (Without Deductions):
| Income Slab | Tax Rate |
|---|---|
| Up to ₹3 lakh | Nil |
| ₹3 lakh – ₹6 lakh | 5% |
| ₹6 lakh – ₹9 lakh | 10% |
| ₹9 lakh – ₹12 lakh | 15% |
| ₹12 lakh – ₹15 lakh | 20% |
| Above ₹15 lakh | 30% |
➡️ Lower rates but no deductions (except for NPS, EPF employer contribution, and standard deduction for salaried).
Tip: Choose your regime based on your annual deductions and investment profile.
Key Deductions That Save You Tax
🔹 Section 80C (Up to ₹1.5 lakh)
-
Investments in LIC, PPF, ELSS, NSC
-
Home loan principal
-
Tuition fees for children
🔹 Section 80D (Health Insurance)
-
Premiums paid for self, spouse, children, and parents
-
Up to ₹25,000 (₹50,000 for senior citizens)
🔹 Section 24(b) (Home Loan Interest)
-
Deduction up to ₹2 lakh on interest on self-occupied property
🔹 Section 80G (Donations)
-
Tax benefit on donations to eligible charitable institutions
🔹 Section 10 Exemptions (for salaried)
-
HRA, LTA, Gratuity, etc.
Filing Your Income Tax Return (ITR)
✔️ Choose the correct ITR Form
✔️ Link PAN with Aadhaar
✔️ Report all income: salary, business, rental, capital gains, interest
✔️ File before July 31 to avoid penalty
✔️ Use Form 26AS and AIS to cross-check reported income and TDS
E-filing portals like www.incometax.gov.in make it easy to file your return online.
Common Mistakes to Avoid
🚫 Failing to declare interest income
🚫 Ignoring income from freelancing or foreign sources
🚫 Claiming ineligible deductions under both regimes
🚫 Not verifying ITR after submission
🚫 Delaying tax payment, leading to penalties and interest
Smart Tips to Save Tax Efficiently
💡 Plan investments at the start of the financial year
💡 Use a mix of tax-saving mutual funds (ELSS), PPF, and insurance
💡 Take advantage of NPS for additional ₹50,000 deduction under 80CCD(1B)
💡 Pay rent to parents (if living with them) and claim HRA (with proof)
💡 Keep proper documentation for all deductions and claims
Conclusion
“Income Under the Lens” reminds us that income tax is not just about compliance—it’s about clarity, control, and conscious financial planning. With a sound understanding of slabs, deductions, and smart savings, every taxpayer can reduce their burden, avoid legal issues, and contribute positively to the nation’s growth. After all, when you know the rules, you can play the tax game smarter.
