How Should I Break Down My 18 LPA Salary for Maximum Tax Benefits? Seeking Advice

Can someone help me decide the CTC breakup for my salary? I am the director and promoter of a private Ltd. company in Noida. I am planning to go for a CTC of 18 LPA. Please break up this salary for maximum tax benefits.

Regards,
Pradeep

Pradeep,

Ask for 40% as basic of Rs. 18L. That means 6.4 L. In Basic, you can claim 50% of basic as HRA as Noida falls under NCR. (HRA minus 10% of your basic is tax exempted). You can ask for ₹15,000 towards Medical assistance (tax exempted subject to production of bills). You can ask for ₹2,400 p.a. as Children Education Allowance (if you have 2 children). You can ask for ₹240,000 towards fuel & maintenance charges (if you own a four-wheeler) or ₹60,000 p.a. for a two-wheeler. If you don't own any vehicle, ₹9,600 towards conveyance allowance is tax exempted.

You can ask for club expenses up to ₹2.00 L p.a. (you need to produce club registration, club ID card, and receipt - Club means health club, holiday club, other registered clubs). You can opt for food coupons up to ₹2,700 p.m. (tax-free). You can opt for Gift coupons up to ₹5,000 p.m. (tax-free). The remaining amount will go into a Special allowance which is fully taxable. Feel free to post for any doubts.

Regards,
Pon

Income Tax Act Sections for Tax Benefits

Could you please enlighten us on the sections of the Income Tax Act mentioned in the remarks below:

You can ask for INR 240,000 towards fuel & maintenance charges (if you own a four-wheeler) or INR 60,000 per annum for a two-wheeler.

Prashant

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Pradeep,

Ask for 40% of Rs. 18L as the basic amount, which amounts to 6.4 L. In the basic amount, you can claim 50% as HRA, as Noida falls under NCR. (HRA minus 10% of your basic is tax-exempt).

You can ask for INR 15,000 towards medical assistance (tax-exempted subject to the production of bills).

You can ask for INR 2,400 per annum as Children Edu Allowance (if you have 2 children).

You can ask for INR 240,000 towards fuel & maintenance charges (if you own a four-wheeler) or INR 60,000 per annum for a two-wheeler. If you don't own any vehicle, INR 9,600 towards conveyance allowance is tax-exempt.

You can ask for club expenses up to 2.00 L per annum (you need to produce club registration, club ID card, and receipt - Club means health club, holiday club, other registered clubs).

You can opt for food coupons up to INR 2,700 per month (tax-free).

You can opt for gift coupons up to INR 5,000 per month (tax-free).

The remaining amount will go into Special Allowance, which is fully taxable. Feel free to ask if you have any doubts.

Regards,
Pon