Consultant vs salary: CA shows how India's wealthy legally dodge lakhs in taxes
“Salaried middle class is using this trick to save lakhs in taxes,” Goel wrote. “High-income professionals are not drawing salary anymore. Instead, they are becoming consultants.”
- Nov 25, 2025,
- Updated Nov 25, 2025 8:49 AM IST
India’s high-income professionals are ditching traditional jobs and turning to consultancy to legally slash their tax bills, according to CA and educator Meenal Goel, who shared a striking example on LinkedIn showing how salaried individuals are paying up to ₹3 lakh more in taxes than business professionals earning the same.
Goel's post compares a ₹24 lakh annual income under two scenarios—salary versus business. The salaried person, even after a standard deduction of ₹75,000, ends up with a taxable income of ₹23.25 lakh and a tax bill of ₹2.93 lakh. Meanwhile, a consultant claiming ₹12 lakh in business expenses brings down taxable income to ₹12 lakh—resulting in zero tax liability under presumptive taxation.
“Salaried middle class is using this trick to save lakhs in taxes,” Goel wrote. “High-income professionals are not drawing salary anymore. Instead, they are becoming consultants.”
Under India’s new tax regime, salaried individuals lose many traditional exemptions like HRA and LTA. This leaves them with minimal deductions, pushing effective tax rates near 30 percent. On the other hand, consultants or freelancers can deduct a wide range of legitimate expenses including office rent, staff salaries, gadgets, internet, and travel.
For instance, someone earning ₹60 lakh as a salaried employee could pay over ₹18 lakh in taxes. But structured as a consultant, their tax outgo can shrink drastically—even by half or more—depending on deductions and the nature of the business.
However, Goel warns that this route comes with trade-offs: no PF, paid leave, or job security. It also involves greater compliance, bookkeeping, and upfront effort.
Still, the financial upside is drawing more professionals toward consultancy. “While the middle class sticks to the comfort of a salary slip… the wealthy are using consultants’ flexibility to build more wealth,” Goel concluded.
Note: The tax computation shown is illustrative. Actual deductions vary case by case.
India’s high-income professionals are ditching traditional jobs and turning to consultancy to legally slash their tax bills, according to CA and educator Meenal Goel, who shared a striking example on LinkedIn showing how salaried individuals are paying up to ₹3 lakh more in taxes than business professionals earning the same.
Goel's post compares a ₹24 lakh annual income under two scenarios—salary versus business. The salaried person, even after a standard deduction of ₹75,000, ends up with a taxable income of ₹23.25 lakh and a tax bill of ₹2.93 lakh. Meanwhile, a consultant claiming ₹12 lakh in business expenses brings down taxable income to ₹12 lakh—resulting in zero tax liability under presumptive taxation.
“Salaried middle class is using this trick to save lakhs in taxes,” Goel wrote. “High-income professionals are not drawing salary anymore. Instead, they are becoming consultants.”
Under India’s new tax regime, salaried individuals lose many traditional exemptions like HRA and LTA. This leaves them with minimal deductions, pushing effective tax rates near 30 percent. On the other hand, consultants or freelancers can deduct a wide range of legitimate expenses including office rent, staff salaries, gadgets, internet, and travel.
For instance, someone earning ₹60 lakh as a salaried employee could pay over ₹18 lakh in taxes. But structured as a consultant, their tax outgo can shrink drastically—even by half or more—depending on deductions and the nature of the business.
However, Goel warns that this route comes with trade-offs: no PF, paid leave, or job security. It also involves greater compliance, bookkeeping, and upfront effort.
Still, the financial upside is drawing more professionals toward consultancy. “While the middle class sticks to the comfort of a salary slip… the wealthy are using consultants’ flexibility to build more wealth,” Goel concluded.
Note: The tax computation shown is illustrative. Actual deductions vary case by case.