How Can I Maximize Tax Savings on My Software Firm Contract Salary?

Dear Experts,

Please find the following details of my monthly salary structure. I am working on a contract for a software firm. Kindly help and give some tips on tax benefits. How much minimum can I invest to save on tax?

Basic: 22,500.00
HRA: 11,250.00
Flexi: 38,550.00
Total: 72,300.00

Deductions:
Tax - FTM: 8,422.00
Prof Tax: 200.00
PF: 2,700.00
Total: 11,322.00

As of now, I have paid Rs. 25,000 for insurance premium, monthly house rent of Rs. 11,000, and I am pursuing an MBA education from a private firm on a monthly EMI basis of 3,200 per month.

Also, I would like to inform you that this salary hike started in August 2008 since I left my previous company.

Thanks and regards,
Mahesh

Hi Mahesh,

Your total annual income is 867,600. Up to 150,000, there is no tax, so 867,600 - 150,000 = 717,600. Now, you can claim tax benefits such as:

- HRA: 105,000
- PF: 32,400
- PT: 2,400
- Insurance: 25,000
- Education: 38,400
- Mediclaim Insurance: 15,000 (if you have any dependent above the age of 65 years, an extra 5,000 can be claimed)
- Car maintenance: 1,200 per month (if you have a driver, you can claim an extra 600 per month)
- If you have any housing loans and interests up to 150,000, you are also eligible under 80C for up to 100,000. However, you have only 25,000; you may consider taking another policy for a 75,000 premium per month.

Now, your taxable amount is 477,800. If you want the exact taxable amount and tax payable amount, you can consult a tax consultant.

Thanks and Regards,
Sree