People often ask this question from the Tax Consultants and Chartered Accountants that what is the tax free salary in india? The answer to this question is that if your annual salary income is up to Rs.5,50,000 then you are not required to pay any income tax on the same.
How we can get tax free salary upto Rs.5,50,000, that we will discuss this in detail in the following paragraphs.
Many people are not in a position to make any investment or savings to save the income tax and they can not claim the benefit of Section 80C which allows a deduction upto 2,00,000 from the total income. They also do not have any Home Loan and thus, not entitled for any deduction for Interest on Home Loan. We are going to explain in this article that even if you are unable to claim the benefit of section 80C deduction or Home Loan Interest deduction, still you can take home annual salary of upto Rs.5,50,000 without paying any income tax.
In this article we will explain you how you can have annual salary up to Rs.5,50,000 with zero tax liability and that too without making any Savings or Investments.
- Under the Income Tax Act, there is no tax if your salary or any other income is upto Rs.2,50,000 per annum.
- Further, all salaried persons are also entitled to claim standard deduction of Rs.50,000
- Further, there is a Tax Rebate of Rs.12,500 under section 87A of the Income Tax Act, if your total annual income does not exceed Rs.5 Lakh
- So, if your total salary income is Rs.5,50,000, your tax liability shall be zero, as per the computation of income shown below:
Total Salary Income 5,50,000
Less : Standard Deduction 50,000
Net Taxable Income 5,00,000
Tax Due 12,500
Tax Rebate u/s 87A 12,500
Tax Payable NIL
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