When working professionals talk about paying taxes 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.
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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.
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3. Medical Allowance
Companies give allowance for the 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.
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5. Leave Travel Allowance (LTA)
This allowance is available for 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.
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7. Uniform Allowance
Some companies give uniform allowance to employees. If your company also gives this allowance, then get it included in the salary, because there is no tax on it.
8. Food voucher or meal allowance
Many companies provide food vouchers or meal allowances, which you can use for food expenses. This allowance is tax-free and saves you money.
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9. Education and hostel allowance
If you have children, 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.
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Do salary planning wisely?
Whenever you join a job, understand every detail of the salary carefully. If these allowances are not included in them, 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.
