Income Tax Savings: If you use the allowances you get with your salary properly, you can save your tax legally. Here are some such allowances, which if included in the salary can reduce your income tax worries.
Tax Saving Tips: When working professionals talk about paying tax on their income, everyone wants to save tax in some way. But instead of Jugaad, it is important to plan wisely to save tax. If you use the allowances that you get with your salary properly, then you can save your tax legally.
Here we are going to tell you about some such allowances, which if included in the salary can reduce your income tax worries.
1. House Rent Allowance (HRA)
Many companies give house rent allowance to employees. If it is not included in your salary, then you can recommend adding it. It can be up to 40-50% of your basic salary and contributes greatly to saving tax.
2. Transport/Conveyance Allowance
It covers the cost of commuting between office and home. If it is not a part of your package, then include it. This will help you save tax on this expense.
3. Medical Allowance
Companies provide allowance for medical expenses of their employees and their families. This can be an important part of your salary and helps in saving tax.
4. Car Maintenance Allowance
If you use your vehicle a lot, then this allowance gives you the benefit of car maintenance, fuel and driver’s expenses. There is no tax on this either.
5. Leave Travel Allowance (LTA)
This allowance is available on travel expenses. You can get your travel expenses reimbursed under this allowance twice in 4 years.
6. Mobile and Internet Reimbursement
Mobile and internet are used in office work. Under this allowance, your bills are paid without tax deduction.
7. Uniform Allowance
Some companies give uniform allowance to employees. If your company also gives this allowance, then include it in the salary, because it is not taxed.
8. Food Voucher or Meal Allowance
Many companies give food vouchers or meal allowance, which you can use for food expenses. This allowance is tax free and saves you money.
9. Education and Hostel Allowance
If you have children, then this allowance can be taken for their education and hostel expenses. This is also tax free.
10. Books and Magazine Allowance
If your work involves reading books, magazines or newspapers, then its allowance can be a part of your salary. This allowance is also not taxed.
Plan your salary wisely
Whenever you join a job, understand every detail of the salary carefully. If these allowances are not included in it, then talk to HR and request to add them to your salary. By doing this, not only will you save tax, but your salary will also be used more effectively.
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