How to Get A Tax Free Income of Over 10 Lakhs Legally!
Many individual tax payers must be wondering how they can save more tax when
their salary is Rs. 10 Lakhs or more. So, here are some tax exemption which we
can use to get a tax free income of over 10 Lakh rupees legally.
1) Basic Exemption: Basic exemption of Rs. 2,50,000 I don't think we need to discuss this.
2) Exemption under 80C: A sum of Rs. 1,50,000 is exempted under Section 80C, which brings the total to Rs. 4,00,000.
- Children Tuition Fee
- Amount Contributed Towards EPF
- Post Office Term Deposit/Bank FD for 5 years
- Amount Deposit in PPF. A public provident fund account(PPF) can be opened with any post office, ICICI Bank, State Bank etc.
- ELSS Tax Saving Mutual Funds
- Senior citizen savings scheme
- Nation Savings Certiñcations ( 5 years and 10 years)
- Principal repayment of Loan Amount
- Life Insurance Premium
- Deposit in Sukanya Samriddhi Account
3) Section 80CCD: An additional Rs. 50,000 is tax exempted if the amount is invested in NPS, which brings our calculation to Rs. 4,50,000.
4) Employer Contribution to 80CCD: This section also allows tax exemption of up to Rs. 1 lakh for contributions made by the employer to NPS. Thus, total tax-free amount adding 1,2,3 & 4 comes to Rs. 5,50,000.
5) Home Loan Interest or HRA: Home owners can claim an exemption up to Rs. 2,00,000 for home loan interest paid. Also, those living on rent could claim HRA, which could go higher than Rs. 2 lakh based on rent paid and eligibility. This makes Rs. 7,50,000 exempt from taxes.
6) Medical Allowance: You can submit medical bills to your employer and claim Rs. 15,000 as medical allowance as part of your total competition.
7) Leave Travel Allowance & Transport Allowance: Most of us tend to ignore these but we can claim expemtion of upto Rs. 25,000 and 19,200 on leave travel allowance and transport allowance respectively. This brings exempted income to 8,09,200
8) Health Insurance: Total exemption limit of Rs. 50,000 for insuring self and senior citizen parents results in the tax-free income to Rs. 8,59,200. Remember its health/medical insurance not life insurance in this we have Rs. 30,000 for parents and Rs. 20,000 for one self.
9) Other Perks: If we add other perks like travel and fuel reimbursements of up to Rs. 1,00,000, Newspaper and periodicals of Rs. 14,000 Telephone reimbursement of Rs. 24,000,and Meal coupons of Rs. 12,000 then it totals up to a amount of Rs. 1,50,000. This means that the total untaxed income amounts to Rs. 10,09,200. Although, these are not provided by all employers but many MNCs and other reputed companies are providing them. One can encash these and reduce their tax burden signiñcantly.
Happy Investing
Source:TheMultiplier.in
Many individual tax payers must be wondering how they can save more tax when
their salary is Rs. 10 Lakhs or more. So, here are some tax exemption which we
can use to get a tax free income of over 10 Lakh rupees legally.
1) Basic Exemption: Basic exemption of Rs. 2,50,000 I don't think we need to discuss this.
2) Exemption under 80C: A sum of Rs. 1,50,000 is exempted under Section 80C, which brings the total to Rs. 4,00,000.
- Children Tuition Fee
- Amount Contributed Towards EPF
- Post Office Term Deposit/Bank FD for 5 years
- Amount Deposit in PPF. A public provident fund account(PPF) can be opened with any post office, ICICI Bank, State Bank etc.
- ELSS Tax Saving Mutual Funds
- Senior citizen savings scheme
- Nation Savings Certiñcations ( 5 years and 10 years)
- Principal repayment of Loan Amount
- Life Insurance Premium
- Deposit in Sukanya Samriddhi Account
3) Section 80CCD: An additional Rs. 50,000 is tax exempted if the amount is invested in NPS, which brings our calculation to Rs. 4,50,000.
4) Employer Contribution to 80CCD: This section also allows tax exemption of up to Rs. 1 lakh for contributions made by the employer to NPS. Thus, total tax-free amount adding 1,2,3 & 4 comes to Rs. 5,50,000.
5) Home Loan Interest or HRA: Home owners can claim an exemption up to Rs. 2,00,000 for home loan interest paid. Also, those living on rent could claim HRA, which could go higher than Rs. 2 lakh based on rent paid and eligibility. This makes Rs. 7,50,000 exempt from taxes.
6) Medical Allowance: You can submit medical bills to your employer and claim Rs. 15,000 as medical allowance as part of your total competition.
7) Leave Travel Allowance & Transport Allowance: Most of us tend to ignore these but we can claim expemtion of upto Rs. 25,000 and 19,200 on leave travel allowance and transport allowance respectively. This brings exempted income to 8,09,200
8) Health Insurance: Total exemption limit of Rs. 50,000 for insuring self and senior citizen parents results in the tax-free income to Rs. 8,59,200. Remember its health/medical insurance not life insurance in this we have Rs. 30,000 for parents and Rs. 20,000 for one self.
9) Other Perks: If we add other perks like travel and fuel reimbursements of up to Rs. 1,00,000, Newspaper and periodicals of Rs. 14,000 Telephone reimbursement of Rs. 24,000,and Meal coupons of Rs. 12,000 then it totals up to a amount of Rs. 1,50,000. This means that the total untaxed income amounts to Rs. 10,09,200. Although, these are not provided by all employers but many MNCs and other reputed companies are providing them. One can encash these and reduce their tax burden signiñcantly.
Happy Investing
Source:TheMultiplier.in
No comments:
Post a Comment