Navigating Salary Restructuring: Which Salary Components Are Taxable or Not?

We are in the process of salary restructuring, which will help employees minimize their tax liability. I would appreciate it if anybody could provide me with a list of salary heads that are taxable and non-taxable.

Thanks & Regards,
Sweta

Non-Taxable Allowances

• Conveyance Allowance - Rs. 800/- per month (no proof required to be produced).

• HRA - 40% of basic + DA in non-metros and 50% in metros (tax benefit for the house rent paid minus 10% of basic + DA, rent receipts to be produced with the PAN details of the landlord if the rent exceeds Rs. 1.00 L per annum).

• Medical Assistance - Rs. 1250/- per month (bills are required to be produced).

• Children Education Allowance - Rs. 100 per child/month (maximum 2 children).

• Children Hostel Allowance - Rs. 200 per child/month (maximum 2 children).

• LTA - Tax benefit twice in a block year of 4 years.

• Uniform Allowance & washing allowance (on production of proof).

Others are taxable.

In addition, the contribution towards NPS (10% of basic + DA) by the employer is also exempted from tax. This amount may be deducted from the CTC of the employees. Food coupons (max Rs. 2500/- per month) are also tax-exempt. Gift coupons up to Rs. 5000 per annum are also tax-exempt.