Hi,
We already have a couple of tax saving components in our salary structure (upto 12% of basic) which includes - reimbursements for book bills, mobile bills, driver's salary, LTA and sudexo coupons. There are upper limits for claiming each. Other salary components include basic (40% of monthly gross), HRA (50% of basic), medical reimbursement (Rs. 1250 per month), conveyance (Rs. 800 per month) and special allowance (remainder of monthly gross).
Employees with higher salary are unable to take much advantage of saving tax since the choices are limited and there are upper limits for claiming each. Can we add a few more components? If yes that what can they be? Can it be done keeping the tax saving component maximum upto 12% only and keeping the overall salary structure as it is? Please advice. Thanks.
From India, Mumbai
We already have a couple of tax saving components in our salary structure (upto 12% of basic) which includes - reimbursements for book bills, mobile bills, driver's salary, LTA and sudexo coupons. There are upper limits for claiming each. Other salary components include basic (40% of monthly gross), HRA (50% of basic), medical reimbursement (Rs. 1250 per month), conveyance (Rs. 800 per month) and special allowance (remainder of monthly gross).
Employees with higher salary are unable to take much advantage of saving tax since the choices are limited and there are upper limits for claiming each. Can we add a few more components? If yes that what can they be? Can it be done keeping the tax saving component maximum upto 12% only and keeping the overall salary structure as it is? Please advice. Thanks.
From India, Mumbai
Hi Reema,
There are host of tax saving components like:
a. LTA - (once in 2 yrs)
b. Child Education Allowance - 2400/- p.a. (2 children)
c. Child Hostel allowance - 4800/- p.a (2 children)
d. Gift voucher - Max Rs.5000/- p.a.
Pon
From India, Lucknow
604There are host of tax saving components like:
a. LTA - (once in 2 yrs)
b. Child Education Allowance - 2400/- p.a. (2 children)
c. Child Hostel allowance - 4800/- p.a (2 children)
d. Gift voucher - Max Rs.5000/- p.a.
Pon
From India, Lucknow
Dear Reema / Pon Sir,
What you quoted is absolutely correct.
This can be claimed only in case where the payments are made. Expenditure proof is required.
Only paying allowance the incumbent can not claim the rebate.
Ramakant
From India, Pune
What you quoted is absolutely correct.
This can be claimed only in case where the payments are made. Expenditure proof is required.
Only paying allowance the incumbent can not claim the rebate.
Ramakant
From India, Pune
Yes Ramakant, all allowances needs to be supported by proof for tax exemption. Pon
From India, Lucknow
From India, Lucknow
Further it is employers responsibility while TDS calculation and final working at the year end that he should confirm all the concern supporting which are claimed for deduction. In the absence of those supporting Employer/ HR/Accounts authority should not considered those deduction and differential TDS is required to be deduct. Pl. note, if employer fails to do this, and due to wrong information by employee if any TDS liabilities arises , it is a responsibility of Employer and not employee. Under the circumstances short deduction of TDS, interest thereon for late payment and penalty if any is to be borne by Employer. Hence while finalising the Salary structures especially in tax angle, HR personal should give clear and crystal idea & alert to avoid further complications.
Pramod Thakar
Pune
From India, Pune
Pramod Thakar
Pune
From India, Pune
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