Maximum tax can be saved with the best salary structure. How to plan for the salary every year and how to reduce tax on it and increase our home take salary. Here are some of the safe components of your salary structure which can minimize your tax burden and help you plan your Salary Structure to reduce tax on their salary and increase their home take salary.
A salaried employee who earns gross total income of Rs. 10,89,720/- can avails tax exemption benefit by way of allowances, savings and deductions detailed below, need not pay any income tax.
Summary of Maximum Tax can be Saved
Tax Free Allowances
Mobile Phone & Internet reimbursement
Company Car & Maintenance Allowance
Leave Travel Allowance
Children Education / Hostel Allowance
Newspaper & Periodicals Allowance
House Rent Allowance (HRA) (approx.)
Total Tax Free Components
80D Medical Insurance
80E Interest on Education Loan
80EE Interest on HL (First time buyer)
80TTA saving a/c interest
Interest on House Property Loan Sec 24
Tax Rebate 87A 2500 (10% of Income)
Basic Income Exemption
Total Tax Free Income (I+II+III+IV+V)
Note that, we have not considered few tax-free allowances like driver salary, car maintenance, Interest free loan, reimbursement of health club etc, and also not considered few deductions like medical treatment, donations, provident fund 12%, that could be save your taxes more.