Section 80C of the Income Tax Act allows us to save tax up to Rs 1.50 lakh if we have made investments in schemes such as Life Insurance (LIC), National Pension Scheme (NPS) or Public Provident Fund (PPF). But if we don’t have investments in the schemes under Section 80C, we may have to pay heavy taxes under the old tax regime. However, if you include these seven allowances in your salary at the time of joining the organisation or sometime midway, you can save a lot of tax. Know how!
Income Tax Saving Tips: It’s the season when offices are asking to submit investment proofs from their employees. Based on these documents, offices will deduct taxes from the salary for the next few months. There are people under the old tax regime who might have invested in schemes such as Life Insurance (LIC), National Pension Scheme (NPS), and Public Provident Fund (PPF).
These investment schemes come under Section 80C of the Income Tax Act, where one is eligible to save tax up to Rs 1.50 lakh.
But those who don’t have investments in such schemes have to pay taxes.
However, even if they don’t have investments and want to save tax, they don’t need to be disappointed.
There are many allowances that, if included in your salary, can help you save tax a great deal.
You can ask you company HR to include these allowances in your salary at the time of joining the job.
Or, if there is a provision in your company, you can also get them included at some later stage.
In this write-up, we will tell you about some such tax-saving allowances.
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Food Coupon or Entertainment Allowance
Food coupons, meal vouchers, or Sodexo coupons also save you tax.
In some companies, it is also called an entertainment allowance.
Not every company gives this allowance.
If it is not included in your salary, you can check with your HR or know the company’s policy about its inclusion.
To claim this allowance, you just need to show food bills of Rs 2000 to the company, and it will reimburse the amount without deducting any tax.
At Rs 2000 a month, you can save tax of about Rs 24,000 a year. If you fall in the 30 per cent tax bracket, you may get a benefit of around Rs 7,200.
Read More: What Is Tax Rebate Under 87A And Who Can Claim It? Step By Step Guide To Calculate Income Tax Rebate
Travel or conveyance allowance
Travel allowance or conveyance allowance covers the cost of commuting between your office and home.
Although most companies give this allowance as part of salaries to its employees, some companies avoid it.
If this allowance is not included in your salary, then get it included so that you do not have to pay taxes.
Mobile phone and internet allowanceUnder this allowance, you get reimbursement for mobile phone and internet bills.
That is, whatever your expenses are, the company gives them to you up to a certain limit without deducting any tax. This reduces your taxable income and benefits you.
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Uniform Allowance
Not all companies provide this allowance to their employees.
You can talk to your company, and if a uniform allowance is available there, you can get it included in your salary.
This allowance is given by the company to the employees to cover the expenses of uniforms.
Car Maintenance Allowance
There are many companies that also provide car maintenance allowance to their employees.
Under this allowance, the employee is given an amount for the maintenance of their car, its fuel expenses, and the driver’s salary.
If you also have high car expenses, you can talk to the HR of your company to get this allowance included in your salary.
Newspaper/Magazine/Books Allowance
There are many jobs that require reading newspapers, magazines, or books.
Media is also one of them. Such companies provide allowance to their employees up to a certain limit.
If you too are in a similar company, you can get this allowance included in your salary and save tax.
Medical Allowance
Some companies also give medical allowance to their employees.
Under this, the employee can reimburse their or their family’s medical expenses.
If this allowance is not included in your salary, then get it done.
