CA Sandeep Kanoi

CA Sandeep KanoiOften, investment for most individuals begins and ends with tax planning. Although it is pertinent to avail tax breaks, this should not be the sole focus. Start by jotting down your key financial objectives, the tentative time of money requirement and the corpus needed to achieve those goals. One can use tax saving investments effectively, to achieve financial goals. For example, one can take a children’s plan that also provides tax benefit. Consider the impact of inflation on your needs. After your first few working years, as income goes up, it is wise to invest beyond one’s tax saving investments to achieve your goals. Also, evaluate the life cover requirement, while planning for your taxes. We are giving below a brief on some of the Popular allowance / Exemption and deductions, benefit of which can be taken by the salaried taxpayers to reduce their tax burden.

Maximising your tax saving

1. Exemptions/reimbursements – Identify the reimbursements available from the company and take maximum advantage of the same. Normal expenses that one incurs could help save tax. Example- Telephone/fuel reimbursements, meal vouchers and company car. A person in lower tax slabs can reduce his tax liability to nil with exemptions alone.

Similarly, salaried employees staying in rented apartments can claim exemption under Section 10(5) of the Act in respect of house rent allowance by making the HRA a component of there salary.

Some of The Popularly Known Exemptions/Reimbursements

House Rent Allowance
Minimum of –

1. Actual HRA

2. Rent Paid – 10% of Basic

3. 40a% of Basic (Non-Metros) or 50% of Basic (Metros)

House Rent Allowance (HRA) Taxability & calculation


Transport Allowance

Rs 800 / Month (1600 Per Month from A.Y. 2016-17)

Leave Travel Allowance

Two trips in a block of 4 Yrs Amount not exceeding Air Economy or Rail AC I Fare shall be for shortest distance and for a single destination

Taxability of Leave Travel Allowance (LTA) – Section 10(5)

Medical Reimbursement – Section 17(2) proviso

Up to Rs. 15,000 in aggregate in a year

2. Deductions

(Republished with Amendments)

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63 responses to “Tips to save Income tax for Salaried Person”

  1. Rina says:

    Dear All,
    Please anyone can help me to make salary break-up,which will help our employees to save their tax
    suggest me the exempt tax amount in following components of salary:
    1.car and fuel,
    2. business promotions,
    3.child education,
    4.medical
    5.LTA
    6.NPS,
    7.Meal coupons,
    8.Car lease,
    9.VPF,
    10.Medical professional development
    11.Health club membership
    12.Mobile bill
    13.Internet bill
    14.PPF as well
    15.Books & periodicals

  2. abhi says:

    i am gov salaried doctor i always pay taxes but in 2014 i withdraw around 20 lac from saving account which comes from different fds for the buying of land but i will not finalize any deal some amount i have used in other places but now i have 11 lac cash can i deposit it again in my account what is the tax provinces

  3. CHAND says:

    i am govt.doctor,my salary ABOUT 56700 p.m.(with H.R.A) but in hand i am taking 52600 p.m.(GPF AND SOME OTHER DEDUCTION)
    i don’t KNOW what to do for next year please could you suggest me what will be my future plan for saving the INCOME tax,i have education loan I HAVE no insurance policy, no ppf account,no policy,no mediclaim,so please advice where i will invest and which policy,i am newly married.

  4. MANISHKUMAR MOHANLAL PATEL says:

    sir my salary is 43000 per month, ple. sagest my tex planing . i have 24000 per year lic policy, 66000 per year PLI

  5. Rahul says:

    My gross Salary is around 30000 per month and i am a bank employee and i have staff housing loan from my bank so as per Income tax rule my interest gain (difference between staff rate & PLR rate) is calculated as my income so just because of that i have to pay more part of my salary as a TAX. So, is there any way that i can save my tax amount.

  6. bikram says:

    Hi, my current package is 7.8 lacs per annum. plz let me know the taxable amount

  7. anand says:

    Hello Experts,

    My Salary is 23 lakhs and i have other freelance income of around 4 lakhs per year.
    I use 2 lakh for home loan, 1.5 lakh for 80c and 25k for 80D and not interested in NPS since im only 32…
    Still I am paying around 3 lakh tax
    Can you help how reduce it furthur….any way i can reduce this.
    Please advise.

    Thanks.

  8. santosh says:

    Biggest saving would be to switch to business and deal with cash. Only 3% of indian population pay tax. It doesn’t mean 97% come under tax brackets but many people don’ t disclose money they receive. Doctors, Lawyers, CAs, and other business men make lot of money but don’t pay any tax. Salaried are the worst affected people in India.

  9. Madhu mohan says:

    Sir ,my father had undergone medical tratment for nuero surgery for which I incurred 8.50 lacks ,my bank reimbursed 4.4 lack and insurance company 70k,my ctc is 5.10 lacks ,I have 48000 deduction for NPS,4141 FOR self health insurance
    Please advice me

    • nirmal singh says:

      You need not to pay any tax. Share your Form 16 i can help you.

    • nandini says:

      In case the entire medical treatment is in the Hospital which is approved by the Chief Commissioner then payment made by employer or reimbursed can be claimed as exemption under proviso to section 17(2). Please note nuero surgery is covered for medical benefit . Please check with the Hospital Authorities, whether they applied with tax officers for approval.

  10. Varma alluri says:

    In case you need help reach out to us dsssvtax@gmail.com and our experts will assist you.You can also call /whatsapp us:9052535440..

  11. Jawahar Lal Mehta says:

    gross income 115000
    less exempt 250000
    net taxable income 900000
    ist 250000- 500000 Rs.25000
    IInd 500000-900000 Rs 80000
    Taotal Tax 105000 plus cess if you have no any investment

  12. shikha kamboj Verma says:

    Hi Sir, My salary is 5,50,000 per annum. i have 20,000 as Life insurance premium per annum, 70,000 PPF annually. How can i save tax further and how much tax will be deducted if I save 90,000 annually.

  13. Himanshu says:

    yes your income almost 6lakh per annum and 80C ded 1.5 lakh. except this you can claim HRA

  14. Prakriti says:

    I have had a recent hike in my yearly CTC which is now 12 lacs for 2016. And in-spite of showing all possible savings I have declared as of now I am still getting a taxbale income of 1lac which is alomost 8k per month deduction.

    Pls can you help me how can I come to zero tax pls?

    My deduction considered were 1.5 lacs under 80 C (LIC, PF, PPF, FD)

    And Reimbursement of 1.04 lacs of fuel, phone and meal cupoun and allowance of HRA, Professional Tax and medical of 17,400 in total.

    Pls suggest?

  15. Jatin Verma says:

    Hi my income is 4.40 lakh. i have LIC of 12000 PA. how much should I save so that i dont have to pay tax

    • vijay gupta says:

      Your Income is 4.40 lakh. Exempt income is 2.50 lakh. Remaining taxable income is 1.90 lakh. you can take 80 C deduction for your LIC premium paid of Rs. 12,000. Now balance income is 1,78,000. Total tax on 1,78,000 is Rs. 17,800. You can take tax exemption of Rs. 5,000. Balance tax payable is Rs. 12,800 plus education cess. You have to plan to save this also.

      • Jatin Verma says:

        thnx sir. Another query If i open a ppf account of rs 30000, will that save my remaining tax

        • vijay gupta says:

          Yes, it will save your tax up to 3000 only. Still you have liability of Rs. 9,800. I am assuming this 30000 yearly deposit.

  16. nag says:

    HI,

    my pkg is 5.1 lpa including variable pay and HRA is 69,000/- p.a, PF 16,560/-, conveyance 9600/- p.a. Now i am only claiming HRA fully. what is the remaing amout taxable and plz Suggest me which is the best scheme/policy to save tax on remaining amount.

    Thanks.

    • Varma alluri says:

      Your Tax Payable amount will be Rs:16,400(app).Utilize sec 80C benefits to full extent to reduce your tax payable amount
      In case you need help reach out to us dsssvtax@gmail.com and our experts will assist you.You can also call /whatsapp us : 9052535440.

  17. Varma alluri says:

    If you have any tax related queries and need tax saving tips you can call /whatsapp us : 9052535440.write us : dsssvtax@gmail.com

  18. ARUN KUMAR ADHIKARI says:

    HI,
    I want to know is there exemption in following perquisites
    car fuel & maintainence
    mobile & internet
    office entertainment
    academic & research allowance
    car driver

  19. raj king says:

    Hi ,
    my CTC is 4.45. I don’t have knowledge on income taxes and all .
    till now i m not declare any tax saving docs b’cos i don’t have any tax saving documents,
    could you please help me out how to save taxes ,
    my monthly income tax deduction 843.00

  20. Annandi says:

    Hi..my basic salary per month is 32,083, HRA 32,083, Peformance Pay 18,642, CCA 3,208, Car Allowance 1,600, Education 200 – Gross Annual Salary 11 lacs. Pls let me know how much tax I will have to pay. Any changes to be done in the pay structure to reduce the tax liability. Pls note that I have invested 150000 in PPF.

    • Varma alluri says:

      Without Form16 we can’t calculate exact tax payable amount.But i roughly calculated your tax payable amount which is around Rs: 96,320.As above said in article try to reduce your tax liability by utilizing exemptions and tax saving financial instruments.
      If you still have any tax related queries and need tax saving tips you can call /whatsapp us : 9052535440.write us : dsssvtax@gmail.com

  21. nitesh desai says:

    hi… my gross salary 45000 annum.how much i need to make savings to avoid tax

  22. Vinod says:

    Hi ,
    my CTC is 6.25. I don’t have knowledge on income taxes and all .
    till now i m not declare any tax saving docs b’cos i don’t have any tax saving documents,
    could you please help me out how to save taxes ,
    my monthly income tax deduction is 2700.

    • Abhilash Siddapur says:

      Understand your gross taxable income which would be after deduction of HRA, transport allowance, Telephone/fuel reimbursements, meal vouchers company car, etc. For eg if after all this deduction if your GROSS TAXABLE INCOME is coming up to say 4.50. You can save another 1.5 under 80C clause and under 80D you can save 0.15 by taking medical insurance for your family and 0.20 in the name of your dependent parents. You can invest in NPS under clause 80CCD and get addition tax benefit upto 0.5. After all this exercise your tax work sheet would look like below
      Gross Taxable income 450000
      Less 80C – 150000
      = 300000
      Less 80D
      family insurance – 15000
      Depedent parent – 20000
      = 265000
      Less NPS 80CCD – 50000
      Taxable income = 215000

      On this taxable income of 215000 you need to pay NIL tax as upto 250000 taxable income, income tax is NIL.

      Under 80C for rebate of 150000 you can invest in ELSS, PPF, bank FD, principle paid for Home loan, Tuition fee etc.

  23. Pinki Tripathi says:

    my gross salary is 48200/month and after EPF deduction I receive 37400/-
    I have insurance for Rs. 85488/year and I deposited in PPF account 1500/ & sukanya plan Rs. 1000/-. I give rent 20000/- per month. Is there any posibility that my companywill deduct tax from my salary. Please advise.

  24. Bhavesh Patel says:

    My salary is 8 Lakh I need complete information how can I save tax.

  25. kumar k iyer says:

    i would like to know the procedures for availing personal loan from individuals for the purpose of house repair/maintenance and to claim income tax deduction for interest paid on the principle in income tax.

    please guide
    me.

    alternatively what are the deductions available for individuals huf to claim income tax refund.

  26. deepak says:

    hi sir..

    i am having an annual salary of 8lakhs. As per tax slab, i guess in need to pay 30000+60000 in total 90k as tax. if have an investment of 1.5 lakhs, it means that i need to tax for the remaining 6.5 lakhs??

  27. chandan singh kashyap says:

    I will solve your problem. But you have to pay for this 10% of taxable amount.

  28. Ranadip Das says:

    Dear Sir,
    I earn about CTC 7.4 lacs per annum, lic -148000, How to save taxes…

  29. Pallavi says:

    Hi Sir,

    My earning is 900000 per annul CTC, please advice me good tax saving schemes.

    • Srikanth says:

      Your Total Annual Salary is 9,00,000
      Basic Tax exemption :Female – 2,50,000
      Under 80C LIC,Suvidha,Bajaj etc – 1,50,000
      Rent Allowance – 1,20,000 > 12K PM 40% of 50%
      P.Tax – 1,400

      Remaining amount under Tax = 3,78,600
      Tax on Total income 37,860+ Cess

    • Srikanth says:

      PPF,LIC,Suvidha if you have a girl child.
      NPS also good Options – which is extra 50000.
      Home loan for you is a good option. you can save 200000 on interest and principal under 80C. and HRA you can claim for 1st Year.

  30. dhandapani says:

    my gross salary is 1150000.please suggest my tax saving plan

  31. Biswabhusan Panda says:

    Awesome information about Tax Saving. Really Financial plan can save income.

  32. veni says:

    My sal is 8Lks.I need complete information how can I save tax.

  33. krishna says:

    If you want to save the tax then you must know about the section that deals with Saving of Income Tax.

  34. Kirpal singh sangwan says:

    Salary 14lac p.a.guife. How I can save maximum income tax.

  35. Naresh says:

    One can deposit max Rs. 1.5 lacs in PPF a/c. Its tax free. Also one can buy Equity linked mutual funds…

  36. Naresh says:

    I earn abour 6 lacs per annun, How to save taxes…

  37. Sangram Kishore says:

    Hi my CTC is 17 L per annum and my only investment is 60000 and PF is 50000.

    What is the process for saving tax. Should I invest more on PPF/FD..

  38. shailesh says:

    my wife having salary of 360000 p. a from this year and deduction is only tds.in my salary structure no pf allowance anything. pls. tell me how i can save taxes. and i dont have any investment nor any insurance.plus got difference of 206000/- this year for six month
    pls give me easiest way.

    • srinivasan.Raman says:

      Play ur Tax . By Investing 1.5 lacs in various instruments ( PPF. Insurance etc ) you save only 15,000/- ( 10% of 1,50,000). Home loan is good ( 20 lacs )

  39. reema says:

    hi sir,

    pls guide me how to save taxes.
    i am a women. having salary of 360000 and deduction is only tds.in my salary structure no pf allowance anything. pls. tell me how i can save taxes. and i dont have any investment nor any insurance.

    pls give me easiest way.

  40. Alisa says:

    hi sir,

    am new to this please guide me how to save tax. Please send a test mail I want to know like for lic or mutual funds the tax exemption is 150000 and if we are investing in medical insurance or medical reimbursement for parents will it be counted apart from this 150000

  41. rajiv says:

    sir
    I am a central govt employee joined in 2001 can I avail Rs. 50000 expemtion under 80 CCD in investing in National Pension Scheme.
    If not
    Or if I invest by my wife name or account then also can i avail exemption ?

  42. SHEKAR G J says:

    Dear Mr Sandeep,

    it is not conveyance allowance, it is Transport allowance exempted up to 1600 PM.

    Conveyance is exempted up to amount actually spent for office purpose.

    Regards
    Shekar

  43. mahesh maisuria says:

    Post office monthly income scheme is taxble or not!

  44. A K Sharma says:

    80CCD(1B) which is applicable from FY 2015-16 is not covered.

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