Tax savings tips for salaried employees

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1. remuneration Restructuring Restructuring your remuneration might not continually be possible. but if your company permits, or if you are on good terms along with your hr department, restructuring a number of elements might cut back your tax liability.Opt for food coupons instead of lunch allowances, as they’re exempt from tax up to Rs 60,000 p.a.Include medical allowance, transport allowance, education allowance, uniform expenses (if any), and phonephone expenses as part of remuneration. produce bills of actual expenses incurred for these allowances to cut back tax Opt for the corporate automotive instead of victimization your own automotive, to cut back high necessity taxation.
2. Utilizing Section 80C Section 80C offers a most deduction of up to Rs. 1,00,000. Utilize this section to the fullest by finance in any of the on the market investment options. a number of of the options are as follows: Public Provident Fund life insurance Premium National Savings Certificate Equity connected Savings scheme 5 year fastened deposits with banks and post office Tuition fees got children’s education, up to a most of 2 youngsters
3. options on the far side 80C If you’ve got exhausted your limit of Rs. 1,00,000 beneath section 80C, here are a number of additional options:Section 80D – Deduction of Rs. 15,000 for medical insurance of self, spouse equivalent and dependent youngsters and Rs. 20,000 for medical insurance of fogeys on top of sixty five yearsSection 80CCF- Deduction of Rs twenty,000, in addition to the Rs one,00,000 beneath 80C, for investments in notified infrastructure bondsSection 80G- Donations to specified funds or charitable institutions.
4. House Rent Allowance : Are you paying rent, nevertheless not receiving any HRA from your company? the least of the subsequent can be claimed beneath Section 80GG: twenty five per cent of the whole income orRs 2,000 per month orExcess of rent paid over 10 per cent of total income This deduction will but not be allowed, if you, your spouse equivalent or minor child owns a residential accommodation within the location where you reside or perform office duties.If HRA forms part of your remuneration, then the minimum of the subsequent three is on the market as exemption:the particular HRA received from your leader.The actual rent paid by you for the house, minus 10 per cent of your remuneration (this includes basic dearness allowance, if any)50 per cent of your basic remuneration (for a metro) or 40 per cent of your basic remuneration (for non-metro).
5. Tax Saving from Home LoansUse your equity credit line with efficiency to avoid wasting additional tax. The principal component of your loan, is included beneath Section 80C, offering a deduction up to Rs. 1,00,000. The interest portion offers a deduction up to Rs. 1,50,000 severally beneath Section twenty four.
6. Leave travel allowanceUse your Leave travel allowance for your holidays, that is on the market twice in a block of 4 years. in case you’ve got been unable to assert the benefit in a particular four- year block, you’ll now transfer one journey to the succeeding block and claim it within the first calendar year of that block. Thus, you will be eligible for three exemptions in this block.
7. Tax on BonusA bonus from your leader is absolutely ratable within the year in which you receive it. but request your leader for the following:If you anticipate tax rates to be reduced or slabs to be changed within the resulting year, see if you’ll push the bonus payment to the subsequent year Produce your tax investment details well before, to stop your leader from deducting tax on bonus before handing it over

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