Why Amitabh Bachchan Pays More Tax Than Shah Rukh Khan: Bollywood's Tax Secrets Revealed

Amitabh Bachchan in Bollywood is referred to as the biggest taxpayer, paying over ₹12 crore annually, reportedly. But surprisingly, the richest among Bollywood celebrities, Shah Rukh Khan, pays less tax than Amitabh. This largely raises questions: how can a richer person pay less tax?

The answer is in the way celebrities organize their expenses and income. With the help of expert financial planning, they use completely legal methods to save crores in taxes.

Using Private Limited Companies or LLPs

Most big stars do not accept payments into their own accounts. Rather, they are received by a company owned by them, such as a Private Limited or LLP (Limited Liability Partnership). This lowers their tax rate from 42% to around 25%. Moreover, business expenses such as rent, travel, makeup, and employee salaries are eligible for tax deductions.

Showing Tax-Free Farm Income

Agricultural income in India is 100% tax-free. Some actors invest in farmland and show a part of their income as coming from agriculture. This reduces their overall taxable income legally.

Investing in Tax-Free Bonds

Celebs like Akshay Kumar and Kareena Kapoor invest in government-backed tax-free bonds such as IRFC or NHPC. These earn them steady returns without any tax deductions.

Company Pays for Personal Lifestyle

Homes, luxury cars, and even PR expenses are often paid by their company. This way, their personal income stays lower and so does their tax bill.

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So next time you hear someone pays “less tax,” it doesn't mean they earn less - they just know how to use the rules smartly.