How to Legally Pay Lower Taxes on ₹7-70 LPA Salary: The Ultimate Indian Tax-Saving Masterclass (Salary, Business & Investments)

If you’re a salaried employee earning ₹7-70 lakhs per annum, I have some eye-opening insights to share that can literally save you lakhs in taxes, and no, I’m not talking about shady loopholes or viral hacks from Instagram reels. I’m talking about legit, government-approved, razor-sharp tax strategies that India’s top earners (and smart professionals) use.

Recently, I watched a brilliant episode of the 1% Club podcast hosted by Sharan, featuring CA Nitesh Buddhadev, a tax expert with deep clarity. This episode dropped a ton of truth bombs, and I’m here to share what I learned and how you can implement it in your own life.

Table of Contents

The First Myth: “If You Earn ₹1L/Month, You Pay Zero Tax”

FALSE… for now.

As of July 2025, if you’re filing taxes for FY 2024–25, you’re still under the old slab, where the exemption limit is ₹7.5L. The new “₹12.75L tax-free salary” rule is only applicable from FY 2025-26 onwards (starting April 1, 2025). So if you’re making ₹12L this year, yes, you will pay some tax.

But here’s the good news: with smart planning, you can legally minimize it.

The 60-Second Regime Check: Old vs. New

Most people jump blindly into the New Tax Regime thinking it’s the better option. But Nitesh introduced a genius 60-second breakeven test:

You only need 2 numbers:

Your CTC
Amount of Eligible deductions and exemptions

Here’s what the breakeven point looks like:

CTC	Deductions Needed (to prefer Old Regime)
₹15,00,000	₹5.93L
₹20,00,000	₹7.58L
₹24,00,000	₹8.50L

Common Deductions & Exemptions You Should Be Claiming

If you earn ₹12LPA or above, there’s a high chance you can hit ₹6-8L in deductions. Here’s where to look:

Likely for Everyone:

Standard deduction – ₹50,000
80C investments (EPF, PPF, ELSS, etc.) – up to ₹1.5L
80D health insurance – ₹25k to ₹75k
HRA exemption
LTA (Leave Travel Allowance)

That’s already ~₹3-5L.

Reasonably Possible:

Flexi Benefits: Mobile, internet, books, fuel reimbursements
Food coupons / Sodexo
Car lease options (massive tax saver)
NPS Contributions

These can add another ₹1–3L.

Special Scenarios:

Car lease policies – Save up to 50% on cost via pre-tax income
Education loan interest (80E) – No limit, claim for 8 years
Joint planning with your spouse – One on Old, one on New Regime
Buy assets in retired parents’ names for rental income – Zero tax up to ₹17L

If you stack all of these, hitting ₹8.5L in deductions is absolutely doable, and that’s where the Old Regime becomes your best friend.

Rental Income Tax Hack

If you’re earning rental income, here’s a little-known fact:

You get 30% standard deduction, no receipts required.
If you took a home loan, you can deduct interest paid, even under the New Regime (if the house is rented).
You can pay zero tax on rental income up to ₹17-25L if planned well.

Pro tip: Buy the property in your retired parent’s name = legally tax-free rent income.

Bonus: Capital Gains Tax Hack

Got ESOPs, mutual funds, or gold?

Section 54F lets you pay zero tax on capital gains if you reinvest in residential property. Smart investors use this to sell appreciated assets and buy real estate, completely tax-free.

Also, there’s the concept of Profit Harvesting:

Every individual gets ₹1.25L of long-term capital gains exemption per PAN per year.
Sell & rebuy your mutual funds to reset your cost price and save ₹15,625 in tax every year.
Do this for yourself, your spouse, and your parents = ₹60,000 tax saved yearly.

Add Loss Harvesting to the mix, use stock market or F&O losses to offset your profits and slash your taxes further.

Final Warning: Don’t Fall for Viral Reels

Flying to Dubai for 6 months to avoid capital gains tax?
Claiming fake HRA or donations?
Filing under your dog’s name?
The Income Tax Department knows everything. Through AIS (Annual Information Statement), they track your:

Mutual funds
Credit card spends
Foreign trips
Bank interest
Car purchases
Property loans
Even satellite images of your “agricultural” land 😳

They can audit you up to 10 years back. And penalties can go up to 300% of the tax evaded. Play smart, not shady.

TL;DR: How to Save Tax Smartly at ₹7-70LPA

✅ Choose the right regime with a 60-second breakeven test
✅ Use every possible deduction and exemption
✅ Plan your car, rent, education, and investment smartly
✅ Harvest profits and losses regularly
✅ Involve your family and optimize PAN-level benefits
✅ And most importantly, don’t wait till March, plan from April

Final Words

A massive thank you to Sharan for hosting this power-packed conversation and to CA Nitesh Buddhadev for simplifying complex tax hacks into real-world action points.

This kind of content isn’t just educational, it’s transformational. Implement just a few of these and you’ll see a serious difference in your take-home income.

As someone who believes in building wealth with clarity and intention, I say this with full conviction: Tax saved is income earned.

Start planning today, Because this is How Money Works

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