Often, 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. Saving Tax on 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(13A) 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
a. House Rent Allowance
Minimum of –
1. Actual HRA
2. Rent Paid – 10% of salary
3. 40a% of salary (Non-Metros) or 50% of Basic (Metros)
Salary here means basic salary and includes Dearness Allowance if the terms of employment so provides. It also includes commission based on fixed percentage of turnover achieved by the employee as per the term of employment contract.
b. Transport Allowance
Rs 1600 / Month (However wef A.y 2019-20 this allowance has been withdrawn and in lieu of it a standard deduction of Rs 40,000 u/s 16 shall be allowed)
c. Leave Travel Allowance
Two trips in a block of 4 Yrs for 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)
d. Medical Reimbursement – Section 17(2) proviso
Medical Reimbursement Up to Rs. 15,000 in aggregate in a year is exempt.(However wef A.y 2019-20 this allowance has been withdrawn and in lieu of it a standard deduction of Rs 40,000 u/s 16 shall be allowed)
2. Income Tax Deductions
a. Section 80C of Income Tax Act, 1961
Section 80C allows a maximum limit of Rs 1.50 lakh across investments ranging from provident fund, PPF, infrastructure bonds, fixed deposits (5 years or more), Sukanya Samriddhi Account, NSC, insurance/pension plans, unit linked insurance, equity linked savings scheme etc. It also includes tuition fees of your children and the repayment of principal on your housing loan. Deduction under section 80C and Tax Planning
b. Home Loan Interest
- The interest component on your home loan has a separate limit of Rs 2 lakh. Income Tax Benefits from House Property and Loan
c. Section 80D of Income Tax Act, 1961
- Medical premia upto a maximum of Rs 25,000 qualifies for deduction, with an additional Rs 25,000 for parents. Additional deduction of 30,000/- (Rs. 50,000/- wef A.Y. 2019-20) could be availed in case of a senior citizen.You can claim a separate deduction for medical premium of your parents. Deduction U/s 80D for Mediclaim Premium to Individual, HUF, Senior Citizens
d. Section 80DD of Income Tax Act, 1961
- A person who have spent money on the maintenance (including medical treatment) of dependant persons with disability, could avail deductions Rs. 75,000 if the disability is not less than 40 per cent and Rs 125,000 in case of severe disability u/s 80DD of the Act. Section 80DD Deduction- Medical expense of disabled dependent.
e. Section 80E of Income Tax Act, 1961
- Individuals paying interest on education loan should obtain the interest payment certificate under section 80E of the Act. Section 80E – Deduction for Interest on education Loan
f. Section 80U of Income Tax Act, 1961
- Those who are suffering from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 75,000/- and in case of severe disability to the extent of Rs. 125,000/- under section 80U of the Act. Deduction U/s. 80U for disabled persons
(Republished with Amendments)
Author Bio
contribution to Atal pension yojna whether makes me eligible for additional deduction under sec 80cccd (1b)?
Thank you very much for your tips ! it was very informative ! I have lot of doubt on Deduction Sections!
Thank you very much Sandeep.
My income is around Rs. 4.0 lakh yearly ,. I am a engineer . Further up-gradation my qualification I deposited myself Rs. 30000/- to a recognize university .Would I get deduction this amount from u/s 80c.
or how much amount I shall get deduction ?
S.S.Mukherjee
My annual income 9.0 lakh
Home loan interest-73214/-
80C savings-2.30 lakh
How many I Tax ??
In which savings I can deduct Income tax ??
Hi Sir, I have 3 FDs (tenure for 2 yrs) & 10 % TDS (around ~ 8K) is already deducted by bank on these investment. Should I disclose interest from FD as another income & pay further tax on this as my current incomes is in 20% tax slab. Kindly suggest.
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
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
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.
sir my salary is 43000 per month, ple. sagest my tex planing . i have 24000 per year lic policy, 66000 per year PLI
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.
Hi, my current package is 7.8 lacs per annum. plz let me know the taxable amount
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.
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.
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
In case you need help reach out to us [email protected] and our experts will assist you.You can also call /whatsapp us:9052535440..
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
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.
yes your income almost 6lakh per annum and 80C ded 1.5 lakh. except this you can claim HRA
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?
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
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.
If you have any tax related queries and need tax saving tips you can call /whatsapp us : 9052535440.write us : [email protected]
HI,
I want to know is there exemption in following perquisites
car fuel & maintainence
mobile & internet
office entertainment
academic & research allowance
car driver
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
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.
hi… my gross salary 45000 annum.how much i need to make savings to avoid tax
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.
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.
My salary is 8 Lakh I need complete information how can I save tax.
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.
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??
I will solve your problem. But you have to pay for this 10% of taxable amount.
Dear Sir,
I earn about CTC 7.4 lacs per annum, lic -148000, How to save taxes…
Hi Sir,
My earning is 900000 per annul CTC, please advice me good tax saving schemes.
my gross salary is 1150000.please suggest my tax saving plan
Awesome information about Tax Saving. Really Financial plan can save income.
My sal is 8Lks.I need complete information how can I save tax.
If you want to save the tax then you must know about the section that deals with Saving of Income Tax.
https://m.facebook.com/Malik9911004870?v=feed&_rdr
Salary 14lac p.a.guife. How I can save maximum income tax.
One can deposit max Rs. 1.5 lacs in PPF a/c. Its tax free. Also one can buy Equity linked mutual funds…
I earn abour 6 lacs per annun, How to save taxes…
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..
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.
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.
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
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 ?
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
Post office monthly income scheme is taxble or not!
80CCD(1B) which is applicable from FY 2015-16 is not covered.