Income Tax rates in India

Total annual Income :
Upto Rs. 1.1 lakh (For women Rs. 1.45 lakh) - No tax.
>1.1 lakh & < 1.5 lakh : 10 % of the amount exceeding Rs 1.1 lakh.
>1.5 lakh & < 2.5 lakh : Rs 5000 + 20 % of the amount exceeding Rs 1.5 lakh.
>2.5 lakh : Rs 25000 + 30 % of the amount exceeding Rs 1.5 lakh.

One can deposit in Provident fund, Life Insurance Policies, National Savings Certificates in Post Offices, exemption for housing loans taken (for the amount paid) etc. For the above deposits up to Rs 1 lakh one get exemption from Income tax.

That is if one having an annual income (Income from all sources - Salary, interest on bank deposits, income from land, agriculture, business etc.) of Rs 2 lakh and if he invests Rs 1 lakh in the PF/LIC/NSC etc. to pay no tax.