If you ask your father at home how much tax he pays, his answer will be 10000, 20000, or ₹ 1 lakh.
However, the rich individuals in the world—specifically, the billionaires who rank at the top of the Forbes list—often pay little to no taxes on their income.
For example, today, Akshay Kumar is the highest taxpayer in India, having paid ₹825 crores in taxes.
I believe you are one of the few individuals in the country who even the income tax authorities commend—not Ambani, Adani, or Tata—despite these business magnates earning thousands of times more than these actors.
But still, why is it that these billionaires, these rich people, pay almost no tax?
This issue is not limited to India; it occurs globally. Billionaires around the world pay almost no taxes. In fact, Warren Buffett once stated in an interview that he pays a lower tax rate than his assistant, despite earning significantly more than she.
But what is the reason behind this? Are these individuals so clever that they exploit government losses, or is the government itself corrupt, aiding these billionaires in evading taxes? Is it not their responsibility to pay taxes?
In this blog, we will discuss the strategies that wealthy individuals use to save on taxes.
You can also save on your taxes by utilizing these strategies.
Before exploring these strategies, it is essential to understand tax management and tax evasion.
Tax Management
In tax management, individuals and businesses can minimize their tax liabilities by utilizing legal deductions and paying the minimum amount of tax required. Companies and business owners employ ethical accounting practices to accurately report expenses and investments, thereby reducing their overall tax burden.
For example, suppose you own a Limited Liability Partnership (LLP). If you fall under the 25% tax bracket and your revenue is ₹1 lakh, you will not have to pay tax on 25% of that amount.
You will first incur all your expenses within the company, make your investments, and undertake various activities to ensure tax deductions. After these deductions, you will need to pay 25% of the remaining profit to the government.
Tax Evasion
In tax evasion, individuals use illegal methods to inflate their expenses and reduce their tax liabilities. This can include investing in shell companies, engaging in money laundering, and transferring funds through various entities. Additionally, perpetrators may create fraudulent invoices, report excessive illegal expenses, and utilize hawala networks for international money transfers, all of which contribute to tax savings.
However, all of these methods are illegal, and if you are caught engaging in them, you could face imprisonment.

People have become entangled in a large-scale money laundering operation, leading to numerous arrests. Several individuals have been apprehended for their alleged involvement in money laundering and other fraudulent activities.
No illegal methods are discussed or promoted in this context.
We will discuss five strategies that will help you save on your taxes legally.
Holding Assets
In the pursuit of business, if you want to become wealthy, you will have to invest and consistently acquire assets.
If you want to create significant wealth, it’s important to understand a key principle that wealthy individuals recognize: earning money requires investing it in the right opportunities. Without making these strategic investments, it becomes nearly impossible to build wealth. Therefore, as soon as affluent individuals earn money, they promptly reinvest it into their ventures.
However, investing in stocks, real estate, or other assets has become increasingly accessible and commonplace today.
The general public can easily make investments; however, most individuals typically invest in their own names, while wealthy individuals tend to make these investments under their business entities.
There are individuals like Warren Buffett whose investment portfolio is valued at $800 billion today.
He has made all those investments not in his personal name but under the name of his company, Big Share Hathaway.
Due to this, Berkshire Hathaway is a company valued at over $800 billion today, and its share price is the highest in the world.
Personal tax rates are typically much higher than corporate tax rates, as these companies contribute to job creation.
The company contributes to economic growth, which is why the government provides them with tax benefits.
While paying personal taxes, you first earn your income, then pay taxes, cover all your expenses, and finally save money. In contrast, in business, you first earn revenue, incur investment expenses, and then pay taxes on the remaining profit.
Due to this, you can minimize your tax liability, and because of the low tax rate, you will pay less in taxes.
Let me explain this with an example. Suppose there are two individuals: one is named Aman, and the other is named Abhishek.

Aman owns a company, while Abhishek is employed. Let’s assume that both have an income of ₹1 lakh and expenses of ₹50,000 each.
For example, when Abhishek earns ₹1 lakh from his job, he will be required to pay 30% in taxes, amounting to ₹30,000. After deducting ₹50,000 in expenses, he will be left with only ₹20,000 in savings.
Aman owns a company and can initially deduct expenses from his income of 1 lakh. After accounting for these expenses, he can reinvest and make investments for the future. He will then be required to pay taxes on the remaining profit.
Let’s assume that the total expenses and investments combined amount to $80,000.
On the remaining final profit of ₹20,000, they must pay a tax of 25%, which amounts to ₹5,000.
Loans on your Assets
Taking out loans against your assets.
Wealthy individuals leverage their assets to secure maximum loans. By pledging their assets with a bank, they can obtain a secured loan at a lower interest rate, since the loan is tax-free, it offers additional financial benefits.
All these billionaires receive tax-free income to support their lifestyles and make various investments.
That means you can generate cash flow without liquidating your assets, allowing you to cover your expenses and make investments.
Let’s assume I own a company named PuneJunkies and hold 50% of its shares. In that case, I would be able to secure a loan of 3 crores against these assets.
Now I can utilize these 3 crores in various ventures. If I take this loan for 10 years at an interest rate of 9%, my monthly EMI will be approximately 3.75 lakhs. However, in this process, I will gain three significant benefits…
- Tax Free Liquidity I will obtain tax-free liquidity for my expenses and investments. I can easily utilize this money to invest in various ventures since all of it is tax-exempt.
- Tax Deduction I will also receive a tax deduction on the interest when I pay the EMI for my loan. This will further reduce my taxable income, allowing me to benefit from additional tax savings.
- Preservation of Assets The most significant benefit I will receive is that I will not have to liquidate my assets. I will obtain substantial funds without selling my assets, which I can utilize for various strategic purposes.

Expenses and Depreciation
Until now, all the strategies you have learned were just the beginning; this strategy will truly blow your mind.
Rich people understand one fundamental principle: how to spend their money wisely.
They allocate their funds wisely, allowing them to maximize their reported expenses while minimizing their taxable income. Additionally, they accurately depreciate these purchases, significantly reducing their overall tax liability.
For example, if I purchase an item for myself that costs ₹1 lakh, I can categorize it as a business expense. When I process the billing, all those expenses will be deducted from my taxable income.
Apart from that, I will benefit from GST, and I can also depreciate this purchase over the next four years at a rate of 15%.
Now, if I explain the meaning of depreciation, it refers to the process of determining the estimated value of a tangible asset, which is a physical asset, based on its useful life.
Now that we have depreciated the value of the item by 15% each year, its worth decreases annually. This depreciation applies not only to the item in question but also to any other expenses I incur, such as purchasing a microphone.
I can depreciate the value of the microphone and the camera I purchased. By depreciating these assets, I can reduce my taxable income and account for all legitimate business expenses. As a result, my taxable income decreases, and I can benefit from depreciation, allowing me to save on taxes in the future as well.
Charity and Donation
Rich people don’t engage in charity solely because it is a noble cause. Billionaire investor Warren Buffett has just pledged to donate $3.6 billion of his fortune to charity.
Just over $5.7 billion is the value of Tesla shares donated to charity last year by CEO Elon Musk. However, they also engage in this practice to maximize their tax savings.
They consistently strive to engage in a wide range of philanthropic activities, including cultural events, donation drives, and charitable initiatives. This involvement enhances their reputation in the market, as individuals with a strong standing tend to attract more business opportunities, allowing them to grow their enterprises rapidly. Additionally, by contributing to these charitable causes, they can maximize their tax deductions.
According to Section 80G of the Income Tax Act in India, individuals are eligible to deduct between 50% and 100% of their charitable contributions. The specific percentage of the deduction depends on the registered NGO, as the government has designated certain organizations that qualify for a 50% or greater deduction.
You can achieve 100% anywhere; this indicates that it is heavily influenced by government regulations regarding taxes.
For example, if your income is ₹10 lakh and, after deducting all applicable expenses, your taxable income is ₹8 lakh, then according to the new tax regime, you will need to pay ₹45,000 in taxes on that amount.
However, if you donate to an NGO that allows you to claim a 100% tax deduction, donating ₹5,000 will render your income tax-free, meaning you will not owe any taxes to the government. I believe that many individuals employ this strategy to minimize their tax liabilities rather than to contribute meaningfully to create a positive impact.
I hope you will implement this strategy to create a maximum positive impact in the world and assist those who are poor and in need.
Step up Basis.
After learning this strategy, you will be completely shocked at how rich people are able to pass their wealth down through generations.
How are wealthy individuals able to rapidly increase their fortunes, and how do they manage to retain their wealth for 200, 300, or even 400 years?
You have likely heard the saying that the rich are getting richer while the poor are becoming poorer, highlighting the growing disparity between the wealthy and the less fortunate.
The rich get richer while the poor get poorer. The wealthy are accumulating more wealth, and the impoverished are facing increasing hardship, all made possible by this strategy.

Let’s assume a person and his father own ₹10 crore in stocks and shares in the stock market. Furthermore, let’s consider that his father initially invested ₹1 crore, which has now grown to assets worth ₹10 crore.
If his father had invested ₹1 crore in these stocks, and he sells these shares, he will realize a profit of ₹9 crores. On this profit, he will be required to pay a tax of 10%, which amounts to ₹90 lakhs.
However, if that person inherits all these shares and assets in his son’s name, when his son sells these shares, he will not have to pay tax on 90 lakhs in his name. Upon inheriting those assets, he will be liable for tax on the inheritance profit, which means he will not have to pay a single rupee on all the profits that existed prior to the inheritance.
It means you maximize your profits, and with this strategy, you can not only reduce your tax liability but also preserve your wealth.
You can transfer your wealth to the next generation by preserving it, which is why I always think in the long term.
Wealthy individuals not only consider the needs of their current generation but also plan for future generations. As a result, they engage in thorough planning of their assets to preserve wealth, facilitate transfers, and take advantage of tax benefits.
Conclusion
To be honest, you all can also utilize these strategies.
Operate your income and your life as if they are a business. When you begin to manage your life like a business, you can optimize your income, allowing you to save significantly on taxes and access various benefits that are often unavailable to the average person.
Now that you are familiar with all the strategies, you can save on your taxes by implementing them.