How Can We Create a Tax-Free Salary Structure with Optional Allowances?

Dear All,

Please, can anyone tell me how to create a tax-free salary structure? According to our company's salary framework, we have BASIC, DA, CONVEYANCE ALLOWANCE, HRA ALLOWANCE, and CHILD EDUCATION ALLOWANCE. However, we are looking to incorporate optional allowances such as Car Allowance, LTA, Sodexo Pass, Gift Voucher, and Medical Reimbursement.

Could you kindly provide information regarding the aforementioned components, such as the exemption limits for taxation?

Regards,
Supriya

Hi Supriya,

In my opinion, there are many components that are tax-free but have Fringe Benefit Tax (FBT). According to our new IT rules, there is now no FBT. Therefore, you can choose such components for tax-free salary structures.

Thank you.