No Tax on Income upto INR 7.75 Lakh for Salaried Employee! See How?

Is not it enthralling that a salaried person with an annual income up to Rs 7.75 lakh can now pay nil tax? Yes, it's amazingly fine under the Budget 2019 proposals, a salaried person with gross total income up to Rs 7.75 lakh can come under no liability to pay taxes. It can be done by investing in various tax saving schemes and avail of different deductions.

Availing different deductions will drop the taxable income to Rs 5 lakh and lead to no tax liability for FY 2019-20. It is anticipated that such a salaried individual can save tax of Rs 15080 in comparison to tax payable in current FY 2018-19.

See how the Budget 2019 proposals open avenues for no tax if you are an individual with a gross total income of Rs 7.75 lakh for FY 2019-20.

First of all standard deduction of Rs 50,000 for FY 2019-20 can be claimed. The Budget 2019 proposes to elevate the standard deduction of Rs 40,000 available for the current financial year by Rs 10,000. So the standard deduction for FY 2019-20 becomes Rs 50,000.

Moving forward to the deduction for PPF, EPF, etc or use tuition fees paid for children, one can invest Rs 1.5 lakh in any such eligible tax-saving avenue under section 80C and claim it as a deduction from the gross total income.

In this way, your gross income of Rs 7.75 lakh will lower down to Rs 6.25 lakh, if you claim a deduction of 1.5 lakh under section 80C

Next is the investment of Rs 50,000 in the National Pension Scheme. Under section 80CCD (1B), you can avail a deduction of Rs 50,000 by investing in the National Pension Scheme.

Next, payment of Rs 25,000 as a premium for medical insurance policy(ies) for yourself and family will enable you to get a maximum deduction of the same amount from gross total income under section 80D. You can avail a higher deduction if you pay a medical insurance premium for your senior citizen parents.

Note: Also you can pay and calculate your online income tax return file via Gen IT software. 

Lastly, your interest income will get a deduction for you to be subtracted from your gross total income. You can claim a deduction of maximum Rs 10,000 under section 80TTA with your interest income.

After the subtraction of total deductions from the gross total income, the gross total income will be reduced to a taxable income of Rs 5 lakh which is exempted from tax. And this is how a salaried taxpayer with the gross salary of INR 7.75 lacks can pay zero tax and save INR 15,080

by claiming the full benefit of Section 80C, 80D for self and family and 80CCD(1B).You can also prepare your agenda to get your income free from tax.