Confused About Salary Breakdown for Tax Savings in Delhi? Need Help Allocating My Pay!

I have been offered a salary package of 9.92 LPA by a company, of which 8.00 Lakh is fixed, and 1.92 Lakh is variable. The company has asked me to bifurcate the salary structure on my own. I am confused. Can you please help me break up my salary and allocate it under various heads to save the maximum on tax?

Salary Breakdown Options

It can be broken down into Basic Salary, Personal Allowance, Other Allowances, Transport Allowance, House Rent Allowance, Leave Travel Allowance (Annually), and Medical Expenses (Annually). There is also an option for opting out of the Provident Fund/Pension Fund. Please help me allocate my monthly salary under various heads to maximize take-home pay and save on taxes.

To structure your salary for optimal tax savings in Delhi, India, consider the following breakdown:

1. Basic Salary: Allocate a portion of your salary as Basic Salary, typically around 40-50% of your total package.
2. House Rent Allowance (HRA): If you are staying in rented accommodation, you can claim tax benefits on your HRA based on certain conditions.
3. Transport Allowance: This allowance is tax-free up to a certain limit, so ensure you utilize this benefit effectively.
4. Leave Travel Allowance (LTA): Plan your travel expenses to make the most of the LTA exemption available for you and your family.
5. Medical Expenses: Opt for the medical reimbursement component to cover medical expenses and avail tax benefits.
6. Provident Fund/Pension Fund: Evaluate the benefits of contributing to these funds as they offer tax advantages and long-term savings.

By strategically allocating your salary under these heads, you can maximize your take-home pay and save on taxes. It's advisable to consult with a tax expert or financial advisor to tailor the salary structure to your specific financial goals and circumstances.