Saswatabanerjee
Partner - Risk Management
Loginmiraclelogistics
Asso.prof.(commerce & Management) Pg
Mani_pooja
Accounts & Hr
+5 Others

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Dear Sir,
My self Neha, working with a private org as Manager-HR. I want to understand on tax related matters and tax saving plannings through below example:
One of our team member got an increment recently and her current CTC is Rs. 508800/- PA. Earlier she was under 10% tax slab but after increment effect it is coming under 20% of tax slab. Can anyone please suggest ways to overcome from this thing as the difference of amount is Rs. 8800/- only as till 5 lacs tax liability is 10%.
What could be the ways to get rid from this or what can be the good tax saving plannings in this case.
Please advice.
Thanks & Regards
Neha

you can pay him 1600 per month as conveyance allowance which is tax free. Also check if he is having any investment . If he is having any medical expenditure , he can get upto Rs 15000/- per annum tax free . check for his HRA applicability as well.
All this will bring down his taxes.

Hi Neha
Use this link and enter the details and the tax will be calculated.
https://incometaxindiaefiling.gov.in/
Option to click will be "Tax Calculator"

I hope you are aware that the income tax at higher tax level is only for the amount exceeding the previous level. So in this case the differential between 10% and 20% is ₹800. Does an additional tax of ₹800 bother you so much that you are looking for ways of evasion ?
I Hope you are saying CTC but some of the things not included in tax. CTC includs management contribution (PF+Gratuity+Etc.). Income tax will calculate on earned income only.
you can bifurcation some part of salary in reimbursment and got a bills of that amount like uniform ,telephone,petrol etc
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If you provide break-up of CTC I can suggest ways to save tax since CTC includes various non-taxable items. Many employers include, leave, EPF Contribution of employers, gratuity and so on in CTC which are not cash cost but annual charges and could be easily be removed for tax purposes. To know more read attachments.


Attached Files
File Type: docx 80 C - savings planning.docx (18.4 KB, 176 views)
File Type: docx 80CCC and 80CCD FYr. 20115-16.docx (38.5 KB, 165 views)
File Type: docx 80-G deductions.docx (26.2 KB, 291 views)
File Type: docx Deduction we use to forget while computing taxable income.docx (14.5 KB, 232 views)

Hi Neha,
It's a general rule... The more you earn, the more you pay taxes.... In the feat to avoid tax, you would not want to limit the salary to under 10% slab cap.
If your team member is earning more than 5 lac salary, then she must be aware of tax saving investments (LIC, PPF, etc). Your role is to deduct the tax, as per applicable rule & her role is to provide you with the investment declaration.
Please ask her to discuss this matter with some good CA / investment broker & not with the Company HR.
If you want to know yourself about good techniques to save tax by investment options, then above answers by other senior members would provide you good starting points.
Best Regards,
Amod.

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