I have been working in a private firm for the past 4 years. However, I don't know anything about income tax. Could someone please help me understand income tax from the basics and provide me with some ideas to save on income tax? Thanks in advance.
From India, Chennai
Acknowledge(0)
Amend(0)
From India, Chennai
Acknowledge(0)Amend(0)
The first step is understanding how your salary is designed.
Salary Components for Tax Savings
HRA is a highly tax-saving component in the salary structure. Other components include:
- Conveyance: ₹800
- Medical: ₹1,250
- Sodexo: ₹2,200
- Telephone: ₹1,500
- Car, Meal Coupons, LTA, Uniform Allowances, CEA
These are the salary components, and you can save income tax on these.
Investments for Tax Exemption
- Section 80(C): Up to ₹1 lakh in tax is exempted for policies, PF, PPF, fixed deposits, tuition fees, home loan principal, NSC, and shares.
- Section 80E: Education loan interest is fully exempted from tax.
Regards.
From India, Mumbai
Acknowledge(0)Amend(0)
429Salary Components for Tax Savings
HRA is a highly tax-saving component in the salary structure. Other components include:
- Conveyance: ₹800
- Medical: ₹1,250
- Sodexo: ₹2,200
- Telephone: ₹1,500
- Car, Meal Coupons, LTA, Uniform Allowances, CEA
These are the salary components, and you can save income tax on these.
Investments for Tax Exemption
- Section 80(C): Up to ₹1 lakh in tax is exempted for policies, PF, PPF, fixed deposits, tuition fees, home loan principal, NSC, and shares.
- Section 80E: Education loan interest is fully exempted from tax.
Regards.
From India, Mumbai
Acknowledge(0)Amend(0)
Hi Aditya, thanks for the information. My payslip has the following components:
- Basic: 16,446
- HRA: 8,223
- Special Allowance: 1,505
- Other Allowance: 12,268
- STATUTORY BONUS: 700
Additionally, I have the following deductions:
- PF: 1,974
- Professional Tax: 200
Could you please advise on my taxable income and the maximum exemption I could receive? I would appreciate any information you could provide.
Thanks,
Prabaharan
From India, Chennai
Acknowledge(0)Amend(0)
- Basic: 16,446
- HRA: 8,223
- Special Allowance: 1,505
- Other Allowance: 12,268
- STATUTORY BONUS: 700
Additionally, I have the following deductions:
- PF: 1,974
- Professional Tax: 200
Could you please advise on my taxable income and the maximum exemption I could receive? I would appreciate any information you could provide.
Thanks,
Prabaharan
From India, Chennai
Acknowledge(0)Amend(0)
Understanding Taxable and Non-Taxable Components of Salary
Basic salary is fully taxable.
House Rent Allowance (HRA)
HRA can be availed if you are staying in a rented home by submitting proof of rent paid. To calculate the benefit, I need the rent amount.
Other allowances, special allowances, and bonus amounts are all fully taxable.
Provident Fund (PF) Contributions
PF contributions, including the total amount and interest earned, are tax-free.
Professional Tax (PT) is also tax-free.
Regards.
From India, Mumbai
Acknowledge(1)Amend(0)
Basic salary is fully taxable.
House Rent Allowance (HRA)
HRA can be availed if you are staying in a rented home by submitting proof of rent paid. To calculate the benefit, I need the rent amount.
Other allowances, special allowances, and bonus amounts are all fully taxable.
Provident Fund (PF) Contributions
PF contributions, including the total amount and interest earned, are tax-free.
Professional Tax (PT) is also tax-free.
Regards.
From India, Mumbai
Acknowledge(1)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
SALARY CALCULATOR & INCOME TAX.zip
Income tax declaration & Salary structre 2012-13.xls