Individuals from the salaried class are often under the misconception that they have a little scope when it comes to saving tax. There are, however, different reimbursements and allowances that they receive in their salary. These allowances and reimbursements provide an opportunity to them to save taxes. Owning multiple properties can also provide them with an opportunity to save on taxes.
Apart from these, there are other provisions which may help them reduce the pinch on their pocket. One of these provisions is House Rent Allowance or HRA, where the deduction of rent paid is available from your gross taxable income, with a maximum amount of 5,000 per month. Leave Travel Allowance (LTA) is another provision where a salaried individual can claim exemption on reimbursement of their travel expenses while they were on leave. For this, they need to keep their bills handy and submit it to their accounts department. There are, however, certain conditions that need to be met if you want to claim the exemption in this case.
Salaried individuals can even claim exemptions on certain investments. Some of the most popular instruments under this section are Employee Provident Fund (EPF), Public Provident Fund (PPF), Life Insurance, National Savings Certificate (NSC), New Pension System (NPS), Home loan’s Principle Repayment, etc. The newest addition to the investment schemes that qualifies for deduction Under Section 80C is the Sukanya Samriddhi Yojana.
If an individual retires from his job or changes the same after working for 5 consecutive years, he is eligible for gratuity repayment. The maximum amount of gratuity that is tax exempt in a lifetime is Rs. 10 Lakh.
For more detailed understanding about the tax saving provisions, read the original article in the link given below. The article appeared in ‘Money Control’ as an authored article by our Director, Mr Vaibhav Sankla.
Source : Money Control