• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • About Us
  • Executive Team
  • Investors
  • Privacy Policy
  • Terms Of Use
  • Contact Us

  • Blog
  • Tax Services
    • E-file ITR for Salaried
    • E-file ITR for Business
    • TDS E-file for Business
    • Manage Tax Practice
  • Tax Optimizer
    • Optimize Tax – Salaried
    • Optimize Business Tax
  • Help
    • FAQs
    • Glossary
    • Resources
    • Product Tour
    • Tax Calculator
  • Efiling
  • Income & Investments
  • Tax Compliance
  • Tax Optimization
  • Tax Refunds

Tax optimiser How Jhaveri can make his pay structure tax friendly

November 19, 2018 by Sudhir Kaushik

[row]
[column lg=”6″ md=”12″ sm=”12″ xs=”12″ ]
[thumbnail target=”_self” src=”https://blog.taxspanner.com/wp-content/uploads/2018/11/eeee5.jpg”]
[/column]
[column lg=”6″ md=”12″ sm=”12″ xs=”12″ ]
Gurgaon-based software professional Suneet Jhaveri pays a high tax because his pay structure is not very tax friendly. He is also not able to claim full exemption for certain allowances. “I get an HRA of Rs 4 lakh (Rs 33,333 per month) but only Rs 1.6 lakh is exempt,” he says. Taxspanner estimates that Jhaveri can reduce his tax by nearly Rs 50,000 if he takes a home loan and opts for the NPS benefit offered by his company. Also, some of the taxable allowances in his salary

[/column]
[/row]

Jhaveri should start by asking that the transport and medical allowances in his salary, which are now taxable, should be replaced with a newspaper allowance. He should also ask for a higher telephone allowance. This rejig will cut his tax by about Rs 9,400.

Jhaveri already invests in the NPS and claims deduction under Sec 80CCD(1b). He can save more tax by opting for the NPS benefit offered by his company. Under Sec 80CCD(2d), up to 10% of the basic salary put in scheme is deductible. If Jhaveri’s company puts Rs 80,000 (Rs 6,666 per month) in the scheme on his behalf, his annual tax will be cut by about Rs 25,000. Jhaveri is only 31, so he should allocate the maximum 75% of the corpus to equity funds.

If Jhaveri takes a home loan, up to Rs 2 lakh interest paid on the loan can be claimed as a deduction. His HRA will be fully taxable, but the home loan deduction under Sec 24 will cut his tax by about Rs 12,500.

INCOME FROM EMPLOYER

[thumbnail target=”_self” src=”https://blog.taxspanner.com/wp-content/uploads/2018/11/Master-1.jpg”]

[thumbnail target=”_self” src=”https://blog.taxspanner.com/wp-content/uploads/2018/11/Master-2-1.jpg”]

[thumbnail target=”_self” src=”https://blog.taxspanner.com/wp-content/uploads/2018/11/Master-3.jpg”]

Write to us for help 

Paying too much tax? Write to us at etwealth@ timesgroup.com with ‘Optimise my tax’ as the subject. Our experts will tell you how to reduce your tax by rejigging your pay and investments.

Filed Under: Tax Refunds

Primary Sidebar

E-mail Newsletter

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

More to See

Steps by step guide to e-File Your ITR

November 5, 2020 By Sudhir Kaushik

5 Ways to E- verify Your Tax Return

November 3, 2020 By Sudhir Kaushik

Tags

black money budget 2017 claim refunds claims tax benefits Direct Tax Burden disclosure bank account drastic positive step e-file tax return effectively save tax file correct returns filing returns form 12bb form 16 Form 26AS home loan nps HRA income tax declaration income tax department income tax india income tax notice income tax return income tax saving ITR Form long-term capital gains NPS professional tax advisor return filing deadline section 80c section 80G short-term capital gains Suggestions Budget 2017 tax tax-free tax benefit tax details salaried taxpayers tax efficiency tax filing returns tax limit tax optimization tax payers tax saving tax saving tips taxspanner undeclared income understand tax laws

Footer

Services

  • E-file Tax Returns
  • Tax Optimizer
  • Respond To ITD
  • Consult Experts
  • Tax Practitioners
  • TDS Returns

Help

  • Product Guide
  • FAQs
  • Tax Calculators
  • Glossary
  • Contact Us
  • Forget Password

Taxspanner logo
TaxSpanner is India’s largest and most trusted website that offers online preparation and filing of individual Income Tax Returns (ITR).

Read More

Copyright © 2022 · Span Across IT Solutions Private Limited.