Even though the I-T Act allows various tax-saving exemptions and deductions, rarely anyone can use it.
There is no pleasant experience for anyone paying taxes. Your income gets as much painful as your tax liability increases with your income. If you are a salaried person who gets Rs. If you earn more than 10 lakh, then you will be afraid of the current income tax rates. That's because your income enters the slab with the highest tax rate. Although the IT Act allows various tax-saving exemptions and deductions, rarely one can use them best.
"In broad terms, there are two main ways to reduce your tax liability. First of all, you can reconstruct your salary in such a way that you can get the maximum tax benefit of all the benefits and benefits that are a part of your salary. Chetan Chandak, head, tax research, H & R Block India, says that if you make your tax better in advance
Tax Savings Through Salary Restructuring
The easiest way to save your tax is by reinstating your salary from your employer so that you have to pay as little as TDS as possible. Let's take a look at the different components of a typical person's salary, how each component can help you reduce your tax velocity.
House rent allowance: Rs. 1.2 - Rs 1.5 lakhs
If you are working in a place where you do not have any home and are living in a rented house, you can include HRA as part of your salary. Believe that you can reduce the tax bracket of Rs 12 lakhs, you can easily get Rs. HR can get tax exemption from 1.2 to 1.5 lakhs.
Transport Allowance: Rs. 19,200
This is a general allowance that is part of the CTC of most salaried taxpayers. "This allowance can reduce your taxable salary to Rs.19,200. Therefore, you can ask your employer to allocate 1600 rupees for the transport allowance from your monthly step," says Chandak.
Medical reimbursement: Rs. 15,000
Almost the same tax benefits can be taken from a medical reinvestment. Income Tax Act: Rs. Medical benefits pay up to 15,000. In one year, your medical bills can easily cross this threshold. So, be sure to submit your bills to your employer and claim full benefits.
Leave Travel Allowance: Rs. 30,000 - Rs 40,000
The LTA is one component of the salary that does not come with a financial cap on the maximum acceptable deduction. However, "You can claim only twice in the block during the four calendar years for domestic travel, so the allowance can save between 30,000 and 40,000 rupees a year easily from tax net in one year.
Food coupons / meal vouchers: Rs. 12,000 - Rs. 26,400
If you receive certain types of food and non-alcoholic drinks or meal vouchers from your employer, Can save up to 50 If the cost of the meal is Rs. More than 50, the excess amount becomes taxable. Based on your employer's policy, you can easily get Rs. Between 1,000 and Rs 2,200 can be saved.
Travel and fuel reimbursement: Rs. 1.5 million
The allowance that is actually spent on traveling or traveling to travel costs; The cost of transferring the official duties is the exemption. Again, the reimbursement figure is not taxed by law, but actual expenses made by employees. Here, Rs. A reasonable estimate of the vehicle to spend 1.5 lakh people in one year is considered.
Telephone costs reimbursement: Rs. 24,000
The actual cost incurred by the employer for the mobile or telephone facility provided to the employee provided on his residence is tax relief in the hands of the employee. "If this facility is provided by your employer, keeping in mind the monthly telephone expenses of Rs 2000, you can claim the benefit of up to Rs 24,000 by submitting a realistic bills to your employer," says Chandak.
Books and magazines: Rs. 12,000 - Rs 24,000
If you buy books or magazines to keep yourself updated with the latest activities in your business area, for which you get compensation from your employer, you can claim tax exemption at such expense.
Rs. 25,000 - Rs. 50,000
Any amount reimbursed by the employer for educational research or other professional occupations, including employee training, short duration / online courses etc. is completely exempt from the income tax on actual bills. It is referred to as Research Allowance and there is no upper limit on tax exemption provided under the I-T Act.
Gift Vouchers:
The cash made by the employer in cash is Rs. There is salvation up to 5000. A gift can be received by the employee or by a member of the employee's family.
Enhance your basic pay and contribution to PF
The employer's contribution to your PF is free from tax of up to 12% of the basic pay and your own contribution is Rs. Based on the limit of 1.5 lakhs / U 80C is eligible for tax deduction. "By increasing your basic pay, you can increase the tax-free element of the employer's contribution, which can help reduce your tax burden. If the basic pay increases can reduce your home-home and HRA's exemption, if you live in your own home It can be used, "informs Chandak.
(Source: H & R Block India)
Tax-saving investment under I-T Act
You can also make tax savings through salaried rents but also by smart investment. Let's take a look at the various tax-saving investment options available at your disposal:
Tax benefits under Section 80C: 1.5 lakhs
This tax savings under the I-T Act are the most popular umbrella of investment. You can invest in many instruments like ELSS, PPF, NPS, tax-savings fixed deposits, five-year post office deposits and Sukanya Sanreedhana Yojana. Your compulsory EPF contribution is also a part of this department. You can also claim tax relief on your life insurance premium, children's school tuition fees, and repayment of your housing loan principal. Section 80C gives you an income of Rs. Can help reduce 1.5 lakh.
Additional Deductions for NPS: Rs. 50,000
NPS offers an additional tax deduction of Section 80 C deduction. Under Section 80CCD (1B), if you have invested in an NPS, you will get Rs. You can get an additional tax deduction of 50,000.
Employer NPS Contribution: Rs. 80,000
NPS can get you a higher tax break You can claim up to 10% of your original salary deduction on your employer's contribution on your behalf. You can ask your employer to switch this approach to save tax more.
Health Insurance Premium: Rs. 40,000
You can save up to 60,000 on health insurance premium paid for yourself, your parents and immediate family. However, it would be wrong to buy large or multiple health cover for the purpose of tax deduction. The purpose of your health cover should be to clear the bills that are entered into your hospital. Let's assume that the total health premium paid by you is about Rs. There are 40,000.
Interest on Housing Loans: Rs. 2 million
If you have a home loan, you save a large amount from the tax net. "Interest payments on your housing loan can reduce your taxable annual income to Rs 2 lakh under section 24. If you are the first time a home buyer, you can get an extra deduction of Rs 50,000 if your loan amount is Rs. 35 lakhs for property of more than 50 lakhs, who live in the rented apartment, can claim home rent allowance (HRA) benefits under 8 percent. If you do not get HRA, you pay under Section 80GG You can get lease rent deduction.
Interest on education loan
Like a home loan, you can make a tax savings on the amount spent on paying your education loan. You are eligible for interest deductions paid on loan under section 80E. Tax benefits are taken if the loan is used for funding your education, your spouse's education or your children's education.
Donated
You are making donations to various charities but you have never considered tax benefits under section 80G. "Many taxpayers are either unaware or the process of claiming to avoid these tax benefits can be tedious as deduction, you can claim up to 50% or 100% of the amount given in the donation. Chandak has said that keeping the donation receipt and your Taking time to reproduce all the details in a tax return will help you.
Therefore, as you can see, properly organized your tax by the reorganization of CTC and the maximum use of tax-saving investments can bring your tax liability down heavily.
There is no pleasant experience for anyone paying taxes. Your income gets as much painful as your tax liability increases with your income. If you are a salaried person who gets Rs. If you earn more than 10 lakh, then you will be afraid of the current income tax rates. That's because your income enters the slab with the highest tax rate. Although the IT Act allows various tax-saving exemptions and deductions, rarely one can use them best.
"In broad terms, there are two main ways to reduce your tax liability. First of all, you can reconstruct your salary in such a way that you can get the maximum tax benefit of all the benefits and benefits that are a part of your salary. Chetan Chandak, head, tax research, H & R Block India, says that if you make your tax better in advance
Tax Savings Through Salary Restructuring
The easiest way to save your tax is by reinstating your salary from your employer so that you have to pay as little as TDS as possible. Let's take a look at the different components of a typical person's salary, how each component can help you reduce your tax velocity.
House rent allowance: Rs. 1.2 - Rs 1.5 lakhs
If you are working in a place where you do not have any home and are living in a rented house, you can include HRA as part of your salary. Believe that you can reduce the tax bracket of Rs 12 lakhs, you can easily get Rs. HR can get tax exemption from 1.2 to 1.5 lakhs.
Transport Allowance: Rs. 19,200
This is a general allowance that is part of the CTC of most salaried taxpayers. "This allowance can reduce your taxable salary to Rs.19,200. Therefore, you can ask your employer to allocate 1600 rupees for the transport allowance from your monthly step," says Chandak.
Medical reimbursement: Rs. 15,000
Almost the same tax benefits can be taken from a medical reinvestment. Income Tax Act: Rs. Medical benefits pay up to 15,000. In one year, your medical bills can easily cross this threshold. So, be sure to submit your bills to your employer and claim full benefits.
Leave Travel Allowance: Rs. 30,000 - Rs 40,000
The LTA is one component of the salary that does not come with a financial cap on the maximum acceptable deduction. However, "You can claim only twice in the block during the four calendar years for domestic travel, so the allowance can save between 30,000 and 40,000 rupees a year easily from tax net in one year.
Food coupons / meal vouchers: Rs. 12,000 - Rs. 26,400
If you receive certain types of food and non-alcoholic drinks or meal vouchers from your employer, Can save up to 50 If the cost of the meal is Rs. More than 50, the excess amount becomes taxable. Based on your employer's policy, you can easily get Rs. Between 1,000 and Rs 2,200 can be saved.
Travel and fuel reimbursement: Rs. 1.5 million
The allowance that is actually spent on traveling or traveling to travel costs; The cost of transferring the official duties is the exemption. Again, the reimbursement figure is not taxed by law, but actual expenses made by employees. Here, Rs. A reasonable estimate of the vehicle to spend 1.5 lakh people in one year is considered.
Telephone costs reimbursement: Rs. 24,000
The actual cost incurred by the employer for the mobile or telephone facility provided to the employee provided on his residence is tax relief in the hands of the employee. "If this facility is provided by your employer, keeping in mind the monthly telephone expenses of Rs 2000, you can claim the benefit of up to Rs 24,000 by submitting a realistic bills to your employer," says Chandak.
Books and magazines: Rs. 12,000 - Rs 24,000
If you buy books or magazines to keep yourself updated with the latest activities in your business area, for which you get compensation from your employer, you can claim tax exemption at such expense.
Rs. 25,000 - Rs. 50,000
Any amount reimbursed by the employer for educational research or other professional occupations, including employee training, short duration / online courses etc. is completely exempt from the income tax on actual bills. It is referred to as Research Allowance and there is no upper limit on tax exemption provided under the I-T Act.
Gift Vouchers:
The cash made by the employer in cash is Rs. There is salvation up to 5000. A gift can be received by the employee or by a member of the employee's family.
Enhance your basic pay and contribution to PF
The employer's contribution to your PF is free from tax of up to 12% of the basic pay and your own contribution is Rs. Based on the limit of 1.5 lakhs / U 80C is eligible for tax deduction. "By increasing your basic pay, you can increase the tax-free element of the employer's contribution, which can help reduce your tax burden. If the basic pay increases can reduce your home-home and HRA's exemption, if you live in your own home It can be used, "informs Chandak.
(Source: H & R Block India)
Tax-saving investment under I-T Act
You can also make tax savings through salaried rents but also by smart investment. Let's take a look at the various tax-saving investment options available at your disposal:
Tax benefits under Section 80C: 1.5 lakhs
This tax savings under the I-T Act are the most popular umbrella of investment. You can invest in many instruments like ELSS, PPF, NPS, tax-savings fixed deposits, five-year post office deposits and Sukanya Sanreedhana Yojana. Your compulsory EPF contribution is also a part of this department. You can also claim tax relief on your life insurance premium, children's school tuition fees, and repayment of your housing loan principal. Section 80C gives you an income of Rs. Can help reduce 1.5 lakh.
Additional Deductions for NPS: Rs. 50,000
NPS offers an additional tax deduction of Section 80 C deduction. Under Section 80CCD (1B), if you have invested in an NPS, you will get Rs. You can get an additional tax deduction of 50,000.
Employer NPS Contribution: Rs. 80,000
NPS can get you a higher tax break You can claim up to 10% of your original salary deduction on your employer's contribution on your behalf. You can ask your employer to switch this approach to save tax more.
Health Insurance Premium: Rs. 40,000
You can save up to 60,000 on health insurance premium paid for yourself, your parents and immediate family. However, it would be wrong to buy large or multiple health cover for the purpose of tax deduction. The purpose of your health cover should be to clear the bills that are entered into your hospital. Let's assume that the total health premium paid by you is about Rs. There are 40,000.
Interest on Housing Loans: Rs. 2 million
If you have a home loan, you save a large amount from the tax net. "Interest payments on your housing loan can reduce your taxable annual income to Rs 2 lakh under section 24. If you are the first time a home buyer, you can get an extra deduction of Rs 50,000 if your loan amount is Rs. 35 lakhs for property of more than 50 lakhs, who live in the rented apartment, can claim home rent allowance (HRA) benefits under 8 percent. If you do not get HRA, you pay under Section 80GG You can get lease rent deduction.
Interest on education loan
Like a home loan, you can make a tax savings on the amount spent on paying your education loan. You are eligible for interest deductions paid on loan under section 80E. Tax benefits are taken if the loan is used for funding your education, your spouse's education or your children's education.
Donated
You are making donations to various charities but you have never considered tax benefits under section 80G. "Many taxpayers are either unaware or the process of claiming to avoid these tax benefits can be tedious as deduction, you can claim up to 50% or 100% of the amount given in the donation. Chandak has said that keeping the donation receipt and your Taking time to reproduce all the details in a tax return will help you.
Therefore, as you can see, properly organized your tax by the reorganization of CTC and the maximum use of tax-saving investments can bring your tax liability down heavily.
No comments:
Post a Comment