What is the tax planning for salaried employees?
Section 80C states the most useful options to maximize take-home salary and lower down the tax pay-out. It offers as much as Rs. 150,000 in terms of tax benefit that can reduce tax outgo by Rs. 45,000 for assessees in 30% tax bracket, when calculated without surcharge and cess.
How can I save maximum tax on my salary in India?
15 Tips to Save Income Tax on Salary
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Employee Contribution to Provident Fund (PF)
- Standard Deduction.
- Professional Tax.
- Exemption of Leave Encashment.
- Exemption Under Section 89(1)
- Exemption from the Receipt Upon Opting for Voluntary Retirement.
How can a salaried employee reduce taxes?
10 Tax Saving Options for Salaried Employees
- Employee Provident Fund. Employee Provident Fund is one of the most popular ways of tax saving for salaried people.
- Public Provident Fund.
- Equity Linked Savings Scheme.
- Life Insurance.
- ULIPs.
- Rental Accommodation.
- National Pension Scheme.
- Health Insurance.
Which tax regime is better for 25 lakhs salary?
For a salary ranging between Rs 20 lakhs and Rs 25 lakhs, the applicable tax rate under the new tax regime would be the highest, that is 30%.
How should I structure my salary to save tax?
It is dependent upon the employee to decide his salary structure in a smart way, i.e. under which heads he wants to receive his salary to minimize his tax liability….Deduction u/s 80D.
| 0-250000 | Nil | |
|---|---|---|
| 500001- 750000 | @10% | 25000 |
| 750001- 1000000 | @15% | 37500 |
| 1000001- 1250000 | @20% | 50000 |
| 1250001- 1500000 | @25% | 62500 |
How can I save tax if I earn 20 lakh?
Tax Exempted Salary Components
- Meal Coupons.
- Car Maintenance.
- EPF (Contribution by Employer)
- NPS (Contribution by Employer)
- Gift voucher.
- Mobile Phone and the Internet Bill Reimbursement.
- Newspaper/Journal Allowance.
- Children Education/Hostel Allowance.
Where a salaried person can save tax?
A tax saving Fixed Deposit or FD is quite popular as one of the tax saving options for salaried individuals. It is a type of FD with which help in availing of income tax deductions for salaried employees on your investments of a maximum of Rs. 1,50,000.
How can I save tax if I earn 30 lakhs?
Tax exemptions can be availed by investing in the following tools:
- Senior Citizen Savings Scheme (SCSS)
- Sukanya Samriddhi Yojana (SSY)
- National Pension Scheme (NPS)
- Public Provident Fund (PPF)
- National Pension Scheme (NPS)
Which tax slab is better for salaried person?
Salaried in lower tax brackets, claiming fewer tax benefits In this case, the old tax regime will suit you better. This is because standard deduction of Rs 50,000 is available to all salaried tax-payers by default under the old tax regime.
Which salary structure is best?
Deduction u/s 80D
| Basic | 600000 | |
|---|---|---|
| Medical reimbursement Amount Received 29600 15000 Actual expense 40000 | 29600- 15000 Least of the three 15000 Exempt 15000 | 14600 |
| Children education allowance 100*12=1200 exempt (one child) | 5000-1200 Exempt 1200 | 3800 |
| Hostel allowance 300*12=3600 exempt (one child) | 5000-3600 Exempt 3600 | 1400 |
How do high income earners reduce taxes?
So, what are the top tax planning strategies for high income employees?
- Contribute to your Superannuation Fund.
- Negatively Gear an Investment Property.
- Get Private Health Insurance.
- Salary sacrifice your vehicle.
- Donate to Charity.
- Income protection insurance.
- Self-Education, Training or Executive Coaching.
Which tax regime is better for 50 lakhs?
Lower tax rates
| Income level (INR) | Old tax rate regime* | New tax rate regime |
|---|---|---|
| Up to 2,50,000 | 0% | 0% |
| 2,50,001 to 5,00,000 | 5% | 5% |
| 5,00,001 to 7,50,000 | 20% | 10% |
| 7,50,001 to 10,00,000 | 20% | 15% |
How can I save tax on salary 2021 22?
Tax Saving Options for AY 2021-22 & What is the Maximum Tax you can Save?
- Public Provident Fund.
- National Pension Scheme (NPS)
- Life Insurance Plans.
- Health Insurance/Mediclaim Under Section 80D.
- Home Loans – Section 24B.