The budget of 2013 did not bring any good news for the tax payers. Everybody was hoping for increasing the threshold limit to pay income tax as well as some more tax relief in the income tax slabs. But nothing came. So if you are on package, you can reduce your tax liability even no change in tax slabs. If the employer can change your pay structure you can save a lot of tax. Here are some points where one can save income tax while on package of the company.
One is advised not to buy the car, instead ask to your company for leasing a car. Leased car is taxable but with very small amount like 1800-2400 Rs. per month. It depends on perk and the size of the car.
Like the value of the car is 8 Lakh and perk value is 28800(2400*12). One can save tax in 30% slab (800000 X 30%) = 2.4 lakh.
The same condition is with the driver too. Instead of hiring a driver, ask the company to arrange a driver for him. It is not worth paying a driver salary post-income tax income or disposable income. The perk value counts in this situation too which will be very beneficial.
One can save for his retirement and save income tax. Ask your employer to invest in NPS for your behalf. As per income tax section 80CCD (2) of income tax act, up to 10% of the basic salary is deductible if invested in NPS.
4- Home Loan
One is advised to have a home loan. Home loan gives a full deduction on home loan interest paid and if the home is let out, only 70% of the rental income is taxable.
5- Professional courses
One can ask his employer to fund for the part or short time course in the year. Only perk value is 10% of the course and one can save a big tax amount on it.
6- Company gadgets
If any employer provides computer, laptop or any other gadgets for company as well as personal use, grab them. The perk value is only 10%.
7- Newspaper and telephone bill
They will be tax free and one needn’t to pay post income tax income on them if employer agrees to include in the compensation value. Perk value is zero in these items.
8- Food and gift coupons
These items can also bring down the income tax liability as perk value is zero but insignificant compare to others.
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