Plan your taxes well and you could save up to Rs 4,000 a month. Even if you aren’t a great planner, you can still save Rs 4,000 a year, thanks to the new tax exemption limits. If you earn Rs 8 lakh a year, you will save Rs 14,400 more in taxes in 2008-9 over 2007-8 even without making a single tax-saving investment.
So, tax on Rs 8 lakh annual income would be:
• Rs 1,49,350 without tax planning
• Rs 1,18,450 with full 80C benefits
• Rs 1,09,180 by adding health insurance benefits
• Rs 62,830 by adding home loan
• Tax liability is down 58% by maximising tax saving investments The 3 tables show how much you can save, at different income levels
For men earning Rs 40,000 a month, the effective tax will come down from 13.5% of their income to about 6.7%. Those earning Rs 12 lakh a year will save almost Rs 50,000 a year in tax, which is 4% of their annual income.
| Click to pick your income and tax brackets |
| Click to know your tax liability & savings depending on investments |
| Click to see how you save on tax |
