Save on Income Tax in India with a Salary of 6.5 Lakhs

How Can I Save Income Tax in India With a ₹6.5 Lakh Salary?

Learn how to save income tax on a ₹6.5 lakh salary in India by choosing the right tax regime and using deductions.

Written by : Knowledge Centre Team

2025-12-29

1284 Views

8 minutes read

Exit Pop Up

Live Life More Confidently

Get best insurance from our experts

Name is required Name should be Valid
Mobile Number is required Mobile Number should be Valid
DOB is required DOB should be Valid
Annual Income is required
Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Filing for and paying income tax to the government is every taxpayer’s responsibility. However, it is also your responsibility as a tax-paying individual to ensure that you do not end up paying more income tax than is due to you. For this reason, the Indian government and the Income Tax Department have made provisions for taxpayers to avail of a variety of options to lower their tax burden.

If you ask, Is there a tax on ₹6 lakh income in India, the answer is yes. However, you can still save significantly on tax.  

If your salaried income amounts to ₹6.5 lakh per annum, there are various ways in which you can save on your overall income tax liability. Let us take a closer look at the methods of tax saving for a ₹6.5 LPA in hand salary.

Must Read - How to Save Tax?

Key Takeaways

  • A salary of ₹6.5 lakh per annum is taxable, but smart planning can significantly reduce your tax liability

  • Choosing between the old and new tax regimes is crucial, as deductions are available only under the old regime

  • Section 80C allows deductions up to ₹1.5 lakh through instruments like EPF, PPF, ELSS, and life insurance premiums

  • Additional tax benefits can be claimed through NPS contributions, donations under Section 80G, and allowances like HRA

  • Term life insurance not only provides financial protection but also helps in saving tax under Section 80C

Maximize Your Tax Savings - Talk to an Expert

Please enter correct name Please enter the Full name
Please enter valid mobile number Please enter Mobile Number
Please enter valid email Please enter Email
Consent is required

Enter OTP

An OTP has been sent to your mobile number

Didn’t receive OTP?

Application Status

Name

Date of Birth

Plan Name

Status

Unclaimed Amount of the Policyholder as on

Name of the policy holder

Policy Holder Name

Policy No.

Policy Number

Address of the Policyholder as per records

Address

Unclaimed Amount

Unclaimed Amount
Error

Sorry ! No records Found

.  Please use this ID for all future communications regarding this concern.

Request Registered

Thank You for submitting the response, will get back with you.

Assessing Your Tax Slab

The first step towards tax saving for a ₹6.5 LPA in hand salary is to determine which tax regime works best for you. A new tax regime was introduced in Budget 2020 that provides lower tax rates than the existing tax regime. Under the new tax regime for FY 2025–26, your salary of  ₹6.5 LPA would fall into the ₹4,00,001–₹8,00,000 slab, which is taxed at 5%.

This flat tax rate is far lower than the tax slab that your salary of ₹6.5 LPA would fall under the 20% slab in the old tax regime (₹5,00,001-₹10,00,000 taxed at 20%). However, the important point to consider here is that the new tax regime does not allow taxpayers to avail various common and popular deductions. Hence, your options with tax savings for a ₹6.5 LPA income become limited.

If you want to avail the benefits of some of the highest tax-saving deductions, it is recommended that you opt for the old tax regime. At the end of the day, it is recommended that you calculate your resulting tax burden under both regimes. Subsequently, you can opt for the one that best lowers your tax burden.

Tax-Saving Instruments

The Government of India has made provisions for a number of tax-saving instruments that allow taxpayers to avail themselves of a beneficial facility while saving on their income taxes. There is a wide variety of deductions you can avail for these tax-saving instruments.

Here are some of the most popular options you can choose to save tax on a ₹6 lakh income in India:

One of the most common ways of saving taxes is by availing a deduction under Section 80C of the Income Tax Act. With Section 80C, a taxpayer can avail tax deductions of up to ₹1.5 lakh, which lowers their tax burden considerably.

To avail these deductions, you can invest in any of the following instruments:

  • Employee Provident Fund (EPF) Investments
  • Public Provident Fund (PPF) Investments
  • Equity Linked Savings Scheme (ELSS)
  • Tax Saving Fixed Deposits
  • Sukanya Samriddhi Yojana
  • National Saving Certificate (NSC)
  • Term Life Insurance Premium

 

  1. National Pension Scheme (NPS) - A government-backed pension scheme that allows public, private, and unorganised sector employees to build a retirement corpus and avail a pension. You can avail a deduction of 10% of salary as employee contribution and avail a deduction under Section 80CCD (1). In addition, you can also avail deductions under 80CCD (1B) for self-contribution and Section 80CCD (2) for Employer contribution to your pension account.
  2. Donations:- You can also avail tax savings for ₹6.5 LPA income while carrying out a noble deed such as a donation to a charity, relief fund, or recognised NGOs. The amount of donations will be exempted from taxation under Section 80G of the Income Tax Act.
  3. Others:- In addition to the above, you can also save tax through House Rent Allowance (HRA) if you live in a rented house, interest paid on home loans under Section 24(b), interest on education loans under Section 80E, and investments under schemes like the Rajiv Gandhi Equity Savings Scheme (RGESS), subject to eligibility and applicable conditions.

Conclusion

Overall, there is a range of tax-saving options available for you to avail tax savings for a ₹6.5 LPA in hand salary. At the end of the day, every taxpayer must determine their financial priorities and opt for the tax-saving instruments and schemes that best fit their portfolio. Having said that, if there is one tax-saving option that is recommended for every tax-paying individual and family, it is that of a reliable term insurance plan.

At Canara HSBC Life Insurance, we offer term plans that not only help you save tax under Section 80C but also provide comprehensive financial protection for your family, ensuring long-term security and peace of mind.

Glossary

  1. Section 80C: A provision under the Income Tax Act that allows deductions up to ₹1.5 lakh on specified investments and expenses
  2. NPS: A government-backed retirement scheme offering tax benefits under Sections 80CCD (1), 80CCD (1B), and 80CCD (2)
  3. Section 80G: A provision that allows tax deductions on donations made to eligible charitable institutions
  4. House Rent Allowance (HRA): A salary component that offers tax exemption for rent paid, subject to conditions
  5. Term Plan: A life insurance plan that provides financial protection to the family and qualifies for tax deductions under Section 80C
glossary-img
Uncertain About Insurance

FAQs

The in-hand salary is usually ₹45,000-₹50,000 per month, depending on tax regime, deductions, and PF contributions.

After standard deductions and basic taxes, the take-home salary typically falls between ₹45,000 and ₹50,000 per month.

Tax liability varies by regime; under the old regime, deductions can reduce tax significantly, while under the new regime, tax applies at slab rates after the standard deduction.

No, ₹6.5 lakh is not fully tax-free under either regime, but effective use of deductions under the old regime can lower the tax substantially.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

Recent Blogs

Will Budget 2026 Allow Joint Taxation for Married Couples?
29 Jan '26
7 Views
8 minute read
Find out what Budget 2026 may introduce on joint taxation for married couples, expected benefits, policy outlook, and how it may impact taxpayers in India.
Read More
Tax Saving
What is Income Tax Return (ITR)? Meaning & Filing Process of Filing ITR
21 Jan '26
4897 Views
10 minute read
Learn what an Income Tax Return (ITR) is, why filing your income tax return is important, and how to file your ITR online via the Income Tax Department. Documents, forms, steps, and FY 2026-27 details included.
Read More
Tax Saving
What Is Advance Tax? How to Calculate Advance Tax and Pay It Online
20 Jan '26
2512 Views
9 minute read
Understand advance tax under income tax, who should pay it, how advance tax is calculated, due dates, and online payment steps to avoid penalties.
Read More
Tax Saving
Importance of Taxes in India: Why Taxes Matter?
15 Jan '26
1608 Views
7 minute read
Understand the importance of taxes in India, how they support public services, economic growth, welfare schemes, and national development.
Read More
Tax Saving
What Is SGST? Meaning, Rates & Applicability Explained
15 Jan '26
626 Views
5 minute read
Learn what SGST means, its full form, tax rates, applicability, and how it works under the GST system for intra-state transactions.
Read More
Tax Saving
What is the GST Council? Role, Members & How It Works
14 Jan '26
537 Views
5 minute read
Understand what the GST Council is, its structure, powers, and how it decides GST rates, laws, and policies across India.
Read More
Tax Saving
Why is Your ITR Refund Delayed and What Can You Do?
13 Jan '26
534 Views
5 minute read
ITR refund delayed? Know the common reasons, timelines, and step-by-step actions to track, raise grievances, and speed up your income tax refund.
Read More
Tax Saving
80CCC: What is Deduction Under Section 80CCC?
11 Jan '26
1179 Views
6 minute read
What is Section 80CCC? How can you claim deductions under section 80CCC? Learn the eligibility criteria to claim a deduction under section 80CCC with a life insurance policy.
Read More
Tax Planning
How to Save Tax on Salary Above ₹15 Lakhs? | Tax Saving Guide 2026
10 Jan '26
4812 Views
14 minute read
Learn how to save tax on salary above ₹15 lakhs using effective tax saving options, deductions, exemptions, and smart income tax planning strategies
Read More
Tax Saving

Tax Savings - Top Selling Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.

Family Shield: Enhanced Protection

iSelect Smart360 Term Plan
  • 3 Plan options
  • Life cover till 99 years
  • Steady income benefit
  • Block your premium at inception

Fixed Returns, Zero Risks & Worries

iSelect Guaranteed Future Plus
  • 4 Plan options
  • Life cover + Guaranteed benefits
  • Accidental death benefit
  • Premium protection cover

Start Young, Pay Less, Stay Secured

Young Term Plan
  • Life cover till 99 years
  • Coverage for spouse
  • Block your premium rate
  • Covers 40 critical illness