If you’re a salaried individual and earning around Rs. 10 lacs per year, the burden of income tax could erode a huge portion of your earnings. Fortunately, with the right kind of planning, you can pay zero taxes. By getting to know the many provisions made available in the Income Tax Act, you can crack the code and learn how to pay zero income tax. If you’re not aware of the deductions and exemptions available to you, worry not, because with this guide, you’ll quickly learn how to pay zero taxes even with an income level as high as 10 lacs per year.

1. First you deduct Rs.50000 as the standard deduction
10,00,000-50,000 = Rs 9,50,000

2. After this, you can save Rs 1.5 lakh under 80C. In this, you can take advantage of income tax exemption on investment in EPF, PPF, ELSS, NSC and up to Rs 1.5 lakh annually.
9,50,000-1,50,000 = Rs 8,00,000
Tip: ELSS will generate best returns (my personal favorite)

3. If you invest up to Rs 50,000 annually in the National Pension System or NPS then under section 80CCD (1B) of the Income Tax Act, you can get exemption in income tax.
8,00,000-50,000 = Rs.7,50,000

4. If you have taken a home loan, you can claim tax exemption on the interest of 2 lakhs under section 24B of income tax.
7,50,000-2,00,000 = Rs.5,50,000
Let’s say you do not have a home loan, but you stay in rental house where you pay 15000 to 20000/month, then also you can save about 150000 to 200000 rupees depends on your HRA component and/ whether you live metro/non-metro city.

5. One can claim a deduction of up to Rs 25,000 for health insurance premium including the cost of preventive healthcare check-up for spouse, children and yourself under Section 80D of Income Tax. Apart from this, if you buy health insurance for the parents, you can get an additional deduction of up to Rs 50,000. The condition is that the parents should be senior citizens.
5,50,000 – 7,5000 = Rs. 4,75,000

Since your net taxable income is less than 5 lakhs, you pay ZERO tax to the government.