CA reveals how high earners save lakhs in taxes while middle class sticks to salary traps

High-income professionals in India are increasingly ditching traditional salaried roles in favor of becoming independent consultants — not just for freedom or flexibility, but to save big on taxes.

According to CA and educator Meenal Goel, the shift is driven by massive tax advantages. “Salaried middle class is using this trick to save lakhs in taxes,” she wrote in a LinkedIn post.

A comparison shows the stark difference: For ₹24 lakh in annual income, a salaried employee pays ₹2.92 lakh in taxes, while a consultant with the same income — but ₹12 lakh in deductible expenses — pays nothing.

The key lies in how income is taxed. Under the new tax regime, salaried individuals lose access to most exemptions and deductions, save for a standard deduction of ₹75,000. Consultants, on the other hand, can deduct legitimate business expenses such as office rent, staff salaries, internet bills, and equipment, slashing their taxable income dramatically.

Goel points out that at higher income levels — say ₹60 lakh per year — salaried professionals can pay up to ₹18 lakh in taxes. But a consultant with smart deductions could reduce this figure significantly.

“Consultants can legally structure income, reduce tax liability, and keep more in hand,” she wrote, noting this trend is growing among India’s top earners.

However, it’s not without trade-offs. Unlike salaried workers who enjoy perks like EPF, paid leave, and job stability, consultants face variable income, no guaranteed benefits, and increased compliance burdens.

Still, when the difference in annual tax liability runs into lakhs — sometimes crores — many are deciding that the security of a fixed paycheck is too expensive.

Goel notes the expense figures are hypothetical and depend on the nature of the consulting work.