How Can I Optimize My Salary Package for Maximum Tax Benefits? Seeking Advice!

Hello all,

My company allows me to structure my package as per my convenience to avail maximum tax benefits. Could you please let me know how I can adjust the following compensation package for the same?

Fixed/Basic Component: 250,000
Flexible Benefit Plan: 300,000
PF + Gratuity: 50,000

I can adjust the flexible benefit plan as per my choice, and it can include:
1. Medical Allowance
2. Conveyance Allowance
3. Leave Travel Allowance
4. HRA
5. Flat Allowance, i.e., Fully Taxable and the amount pending after all the above benefits.

Thanks in advance.

Regards,
Anand Sancheti

Dear Anand,

The flexible components can be designed as follows:
- Medical Allowance: Rs. 15,000 per year
- Conveyance Allowance: Rs. 9,600 per year
- Child Education Allowance: Rs. 100 per month per child for a maximum of 2 children
- Sodexo Coupons: Maximum up to Rs. 2,500 per month
- LTA: You can claim any amount as LTA because once you provide proof of travel for yourself or your dependents (only domestic air tickets are reimbursable).
Any other allowances are taxable.

I hope I was able to assist you in formulating your salary to some extent, at least.

Regards,
Renu