Jeevarathnam
Sr. Manager Hr/admin
Madhurihs
Hr Executive

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Hi,
I'm working on re-structuring the salary components in my present company. My objective is to try make it more tax friendly and ensure better in-hand. Can somebody help me understand the following points in little detail?
1. Supper annuation, if included in the monthly salary, is taxable to the employer or employee? I guess, its taxable to employee, but if yes, then is it fully taxable or partial?
2. Can we add two allowances like Education allowance & Hostel allowance, that comes to rs. 400 and show in the monthly salary?
3. Is there any amount or percentage limit on Medical claim Insurance policy? In my present company, we give it out on annual basis as 50% of basic. Is there any particular percentage as per Income tax act?
Thanks,
Madhuri

From India, undefined
Hi Madhuri
1) If you are paying as super annuation on monthly basis then its taxable salary for employee
2) You can't add 2 allowances together
3) There is no any % on insurance policies. But employee can avail the TAX Exemption on the Insurance under 80C total of upto 1,50,000 including all the savings components under 80C & Medical insurance exemption under 80D etc
4) There are other exemptions such as HRA, Medical allowance upto 1250/- PM, Conveyanec allowance 1600/- PM

From India, Bangalore
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