In India, tax is charged on income, not on expenses. Even if a person spends ₹60,000 every month, tax will only apply to their annual income, not the amount they spend. Spending patterns indicate lifestyle, but they do not directly affect tax liability.
₹60,000 Monthly Spending Equals ₹7.2 Lakh Yearly
If your monthly expenditure is ₹60,000, you spend a total of ₹7,20,000 in one year. However, this number alone does not decide how much tax you will pay. The tax depends completely on how much you earn.
Tax Under the New Tax Regime
The new tax regime offers ₹3 lakh tax-free income. If your annual income is around ₹7.2 lakh, your taxable income becomes low after applying standard deduction. This reduces tax significantly. In many cases, the tax amount becomes very small or nearly zero.
Tax Under the Old Tax Regime
The old regime allows multiple deductions such as Section 80C, health insurance, home loan interest, and standard deduction. With these benefits, even if your income is around ₹7.2 lakh, your taxable income can drop enough to make your tax liability almost zero.
Higher Income Means Higher Tax, Not Higher Spending
If someone earns ₹10 lakh, ₹15 lakh, or ₹20 lakh annually but spends only ₹60,000 per month, tax will still be calculated on their income slab. Expenses do not reduce tax unless they qualify as deductions under specific sections.
Income–Expense Mismatch Can Raise Questions
One area where spending matters is mismatch. If you spend ₹60,000 monthly but declare an annual income of just ₹3–4 lakh, the Income Tax Department may question the source of funds. As long as your income is declared and legitimate, there is no issue.
Final Summary
A monthly expenditure of ₹60,000 does not directly create any tax liability. Tax is always applied to income. If your income is properly declared and falls within the tax slabs, your spending amount does not change your tax.