How to get your full gross salary in your bank account every month

In India you are subject to high taxes (30%+) as a corporate employee(slave? :)). The tax rates get progressively higher as you earn more, however there is one trick you can employ to get your full gross salary in your bank account every month. The catch is that you would still pay the tax at the end of the year, but only in the last two months. The tax that you save through out the year can be invested and if you can generate atleast a market return on it you will be ahead by a not too shabby some of money (depending on how high your income is in the first place). Let's explain this with an example,lets assume you have a monthly gross salary of 1,50,000 INR and you are liable to pay tax of 20,000 INR a month. If you don't pay any tax during the months April - Jan of the following year and pay everything in the last two months, you save the cumulative amount of 2,00,000 INR through the year in taxes which you pay lumpsum in the last two months of the financial year i.e. Feb and March of the following year. Saving this amount through the year enables you to reinvest it, a tax amount saved at the end of april is not paid until the end of Feb of next year giving you a full 10 months of invested income. Similarly for the months of May - Jan (of next year), even if we assume we pay everything in Feb we still get a tidy investment period. In this case generating a market-matching 12% return would yield a savings of approx 11,000 INR a year. The detailed calculation is illustrated below -

Month	Amount	Net Interest Earned(till Feb)
Tax saved in April	20000	2000
Tax saved in May	20000	1800
Tax saved in June	20000	1600
Tax saved in July	20000	1400
Tax saved in August	20000	1200
Tax saved in September	20000	1000
Tax saved in October	20000	800
Tax saved in November	20000	600
Tax saved in December	20000	400
Tax saved in January	20000	200
	Total Saved	11000

Although the amount may feel low to some, over the years it can quite a handful (especially if its reinvested). Now we would offcourse weigh in the effort (and risk?) needed to do this. I would claim that the effort and risk are both minimal and the entire process is legal. All one has to do is to declare certain liabilities which would outstrip your gross income, this can be done irrespective of how high your gross income actually is.

Magic of Section 80E

Section 80E of the Indian tax code, is one section which has no tax exemption limit meaning you can theoritically claim any amount as an exemption and get it deducted from your taxable income. The section is basically an interest amount deduction for any loans you would have taken to fund an educational endeavor, we don't need to take any loans though, we only need to declare we did. Most companies, if not all companies don't expect you to have investment proofs at the beginning of a financial year and allow you to declare anything. If you declare that you have a tax liability equal to your gross income under section 80 E your taxable salary which is basically (gross - exemptions) is now zero. So through the year you don't pay any taxes, obviously every company requires (or should require) you to submit actual proofs come February of next year, when you would not have the proof for the claimed declaration, its fine you can just cross that out and submit whatever exemptions you do have proofs for and claim a regular exemption. This particular detail (of whether you can submit new proofs) may vary so please check this before employing this method. I am not liable for any losses you might incur due to the contents of this article, please do your own research. Even if your company does not allow for new proofs just submit an exemption amount under 80E which is your gross salary - (regular exemptions) and leave it at that.