Hello All,
I need your help to redesign the salary structure to save the employees' tax.
Recently we are following the below salary structure.
Do guide me if we can save the taxes of employee by adding or deleting any component or by increasing or decreasing any limit of certain component.(here in our organization, majority of employees would like to know the other sources to save the taxes apart from those which comes under80C)
BASIC(Gross*25%)
HRA(Gross*15%)
LTA( 40,000Rs/- Annually)per month 3333RS/-
Conveyance(800*12) =9600RS./-
Medical Allowances(1250*12)=25000Rs/-
Employee + Employer PF( 6500 *12%) /(6500*13.61%)
TAX( 200*12/feb 300Rs) = 2500Rs/-
Thank you and awaiting for your response!
From India, Mumbai
2I need your help to redesign the salary structure to save the employees' tax.
Recently we are following the below salary structure.
Do guide me if we can save the taxes of employee by adding or deleting any component or by increasing or decreasing any limit of certain component.(here in our organization, majority of employees would like to know the other sources to save the taxes apart from those which comes under80C)
BASIC(Gross*25%)
HRA(Gross*15%)
LTA( 40,000Rs/- Annually)per month 3333RS/-
Conveyance(800*12) =9600RS./-
Medical Allowances(1250*12)=25000Rs/-
Employee + Employer PF( 6500 *12%) /(6500*13.61%)
TAX( 200*12/feb 300Rs) = 2500Rs/-
Thank you and awaiting for your response!
From India, Mumbai
u can add the following in your salary structure : 1. Education allow - Rs.100/- per child p.m. 2. HRA should be made 50% of Basic. 3. Allow PF contribution on full Basic without any limit.
From India, Mumbai
From India, Mumbai
Increase the Basic to 50% of basic so that more HRA can be considered for tax planning purposes. pon
From India, Lucknow
From India, Lucknow
Hi, You may add 1.Telephone reimbursements 2.Medical reimbursements: 3.Company provided car 4.Club membership 5.Meal coupons: 6.uniform Allowances 7.CEA 8.Magazine 9.Car Maintenance
From India, Mumbai
From India, Mumbai
Hi Aditya,
I have few queries on the same. Hope you wont mind to explain it.
1) As you have mentioned about telephonic reimbursement, what would be the maximum limit for the same and what about for those employees who are using Prepaid connections? Can we apply the fixed amount for everyone or is it compulsion for them to submit their bills?
2)Medical Reimbursement:- If I am not wrong than this would be apply to those employees who were on sick leaves for longer duration say 3 or more days. They can submit their actual bills of medical treatment and we reimburse it.Correct? Please make me correct if I am wrong somewhere.
3)Company provided car - We have the majority of employees who are using their own car for the office purpose. Is it possible for them to reimburse their petrol bills or can we reimburse according to their distance from office to house? If yes, what would be the maximum limit for the same and howmuch we should re-imburse per KM?
4) Club Membership:- How actually works? What would be the calculation or limit for that?
5)Meal Coupons:- Again,We do not have any facility called meal coupons- Can we again apply the fixed amount for all ( Eg;- Per meal 50Rs. like that)
6)Uniform Allowances,CEA,Magazine,Car Maintenance :- Kindly elaborate these terms in brief.
I would really appreciate your help Aditya.
Thank a ton in advance.
Regards,
Knowledge - HR
From India, Mumbai
I have few queries on the same. Hope you wont mind to explain it.
1) As you have mentioned about telephonic reimbursement, what would be the maximum limit for the same and what about for those employees who are using Prepaid connections? Can we apply the fixed amount for everyone or is it compulsion for them to submit their bills?
2)Medical Reimbursement:- If I am not wrong than this would be apply to those employees who were on sick leaves for longer duration say 3 or more days. They can submit their actual bills of medical treatment and we reimburse it.Correct? Please make me correct if I am wrong somewhere.
3)Company provided car - We have the majority of employees who are using their own car for the office purpose. Is it possible for them to reimburse their petrol bills or can we reimburse according to their distance from office to house? If yes, what would be the maximum limit for the same and howmuch we should re-imburse per KM?
4) Club Membership:- How actually works? What would be the calculation or limit for that?
5)Meal Coupons:- Again,We do not have any facility called meal coupons- Can we again apply the fixed amount for all ( Eg;- Per meal 50Rs. like that)
6)Uniform Allowances,CEA,Magazine,Car Maintenance :- Kindly elaborate these terms in brief.
I would really appreciate your help Aditya.
Thank a ton in advance.
Regards,
Knowledge - HR
From India, Mumbai
Hi,
1.It should be termed Medical Reimbursement, not Medical Allowance. This is because allowance per se is taxable in all cases, except those specifically exempted.
For general medical reimbursement, Rs 15,000 is the maximum tax break that an individual can avail of against actual supporting documents.
2.telephone reimbursement provided to employees is not taxable. This is as per Rule 3(7)(ix)
Telephone connection includes both land line and mobile connections. While there is no explicit reference to data card connection in Rule 3(7)(ix), some experts opine that data card falls under the mobile phone category since a data card is just a SIM card.
1. There is no explicit reference to the maximum number of connections allowed, in the rule. Organizations typically allow one land line and one mobile connection under Telephone Reimbursement for each employee.
2. The connections have to be in the name of the employee.
3. Employees should submit telephone bills to their organization while seeking telephone reimbursement.
4. Expenses incurred towards both pre-paid and post-paid mobile connections are admissible for tax exemption.
3.Car Allowances: If the company provides you a car for personal and official purposes and reimburses the fuel, insurance, maintenance and driver’s salary, the taxable value shall be: in case the cubic capacity of the car is less than or equal to 1600cc – Rs 1,800 per month (plus Rs 900 for the driver) and in case the cubic capacity of the car is greater than 1600cc – Rs 2,400 per month (plus Rs 900 for the driver).
4.Free meals provided to you through paid vouchers, not transferable and usable only at eating joints to the extent of Rs 50 per meal are safe.
5.Uniform Allowance - Uniform allowance is not considered as Perquisite U/s. 10(14). This however needs to be a uniform not a civil dress.
6.Asset assistance given by your employer. For example, provision of a computer or laptop owned by the company and provided to you or any member of your household is not taxable in your hands.
7.The reimbursement of health club, sports club membership fees and similar facilities provided uniformly to all employees would not be taxable in your hands.
8.Children’s Education Allowance(CEA) is exempt up to Rs 100 per month per child up to a maximum of two children. Also, Rs. 300 per month per child up to two children is allowed if they are in hostel
From India, Mumbai
1.It should be termed Medical Reimbursement, not Medical Allowance. This is because allowance per se is taxable in all cases, except those specifically exempted.
For general medical reimbursement, Rs 15,000 is the maximum tax break that an individual can avail of against actual supporting documents.
2.telephone reimbursement provided to employees is not taxable. This is as per Rule 3(7)(ix)
Telephone connection includes both land line and mobile connections. While there is no explicit reference to data card connection in Rule 3(7)(ix), some experts opine that data card falls under the mobile phone category since a data card is just a SIM card.
1. There is no explicit reference to the maximum number of connections allowed, in the rule. Organizations typically allow one land line and one mobile connection under Telephone Reimbursement for each employee.
2. The connections have to be in the name of the employee.
3. Employees should submit telephone bills to their organization while seeking telephone reimbursement.
4. Expenses incurred towards both pre-paid and post-paid mobile connections are admissible for tax exemption.
3.Car Allowances: If the company provides you a car for personal and official purposes and reimburses the fuel, insurance, maintenance and driver’s salary, the taxable value shall be: in case the cubic capacity of the car is less than or equal to 1600cc – Rs 1,800 per month (plus Rs 900 for the driver) and in case the cubic capacity of the car is greater than 1600cc – Rs 2,400 per month (plus Rs 900 for the driver).
4.Free meals provided to you through paid vouchers, not transferable and usable only at eating joints to the extent of Rs 50 per meal are safe.
5.Uniform Allowance - Uniform allowance is not considered as Perquisite U/s. 10(14). This however needs to be a uniform not a civil dress.
6.Asset assistance given by your employer. For example, provision of a computer or laptop owned by the company and provided to you or any member of your household is not taxable in your hands.
7.The reimbursement of health club, sports club membership fees and similar facilities provided uniformly to all employees would not be taxable in your hands.
8.Children’s Education Allowance(CEA) is exempt up to Rs 100 per month per child up to a maximum of two children. Also, Rs. 300 per month per child up to two children is allowed if they are in hostel
From India, Mumbai
There is NPS option under sec 80 CCD which is tax exempt upto 10% of basic+DA. Pon
From India, Lucknow
From India, Lucknow
Hi,
1.For car allowances you need to submit the details and the bills.
2. for meal coupons you may get 50rs per meal as tax exemption, if employer is providing non transferable coupons for working days.
From India, Mumbai
1.For car allowances you need to submit the details and the bills.
2. for meal coupons you may get 50rs per meal as tax exemption, if employer is providing non transferable coupons for working days.
From India, Mumbai
So we can not reimburse the meal amount...correct? as company is not providing any coupon....
From India, Mumbai
From India, Mumbai
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Tax Saving on Medical Reibursement under section 17(2) .pdf
SOME OF THE TAX SAVING SAVINGS.docx