Every March, the same dilemma plays out for many professionals. One journalist, like countless others, would search YouTube for answers to the dreaded question: “How to save tax?” The result? A flood of conflicting advice — ELSS funds from one video, insurance from another, and formula-heavy explanations from others. Instead of clarity, confusion reigned.
This year, the journalist decided to try something different. She turned to an AI assistant with a straightforward prompt:
“My CTC is ₹15,00,000. Can you help me save tax for FY 2024–25?”
The outcome was a clear, personalized roadmap that actually worked — saving nearly ₹45,000 in taxes.
Salary structure (CTC ₹15 lakh)
The journalist’s salary breakdown was typical for a mid-level professional:
- Basic salary: ₹6,00,000
- House Rent Allowance (HRA): ₹3,00,000
- Special allowance: ₹3,00,000
- Performance bonus: ₹2,00,000
- Employer PF contribution: ₹72,000
At first glance, it seemed tax-efficient. But deeper analysis revealed overlooked opportunities.
1. HRA exemption — the big miss
The AI assistant asked simple but crucial questions:
- Do you live on rent? → Yes
- Monthly rent? → ₹25,000
- City? → Bengaluru (metro)
The HRA exemption calculation revealed that ₹2,40,000 was exempt from tax, leaving only ₹60,000 taxable. The journalist had previously been paying tax on the full ₹3 lakh — an error now corrected.
2. Overlooked deductions
Several eligible deductions were also identified:
- Employee PF: ₹72,000
- Term insurance premium: ₹20,000
- Health insurance premium (80D): ₹25,000
- Donations (80G): ₹10,000
The AI also reminded them of popular Section 80C options like PPF, LIC, home loan principal, and ELSS.
3. Bonus restructuring
The ₹2 lakh annual bonus was fully taxable. The suggestion? Restructure into allowances such as LTA, professional development, or fuel reimbursements — provided the employer permitted.
4. Old vs. new regime comparison
After applying exemptions and deductions, taxable income under the old regime came to ₹10.83 lakh, compared to ₹14.5 lakh under the new regime.
Approximate tax liability:
- Old regime: ₹1,37,640
- New regime: ₹1,82,500
Savings: ₹44,860 — simply by using exemptions correctly and sticking with the old regime.
Lessons and checklist
The journalist realized that many salaried individuals miss out on benefits they are already entitled to. The experience yielded a practical checklist:
- Recalculate HRA correctly
- Max out 80C (PF, PPF, ELSS, LIC, home loan)
- Don’t forget 80D and 80G
- Compare old vs. new regimes before filing
- Explore reimbursement options with HR
- Start early and use digital tools or advisors
Conclusion
For this journalist, what made the difference wasn’t complicated tax hacks but simply asking the right questions and applying the rules properly. By turning to an AI assistant, they not only gained clarity but also saved nearly ₹45,000 — proving that smart, proactive planning beats last-minute panic.
Disclaimer: This article is for educational purposes only and not tax advice. Individuals should consult a qualified tax advisor for personalized guidance.
