Are you interested to lower your tax outgo on your salary? If yes, then we’ve got you covered. This post covers some infallible ways that can be used by salaried individuals to make the most of their saving.
- Consider submitting your medical bills on time
To save tax on your salary, it is favourable to safely keep all the receipts of your medical expenses. Doing so can help you gain the tax benefit on your as well as your dependents medical expenses of up to Rs 15.000.
- Gain tax benefits on rent paid
Salaried individuals can claim tax benefit on HRA if they live in a rented accommodation. This can be partially or completely exempt from tax.
- LTA deduction for travel expenses
This is another best method to save tax for salaried individuals. You can claim LTA (Leave Travel Allowance) two times in a period of four years. It is not a mandatory benefit; it’s all up to your employer that while deciding your pay structure, LTA can be included or not.
- Daily Travel Allowance
Employees can also use this tax saving tip to gain some tax relaxation. You can ask your employer for daily travel allowance. However, it is implemented to support your expenses only of the commute between work place and residence. Daily travel allowance of Rs. 1,600/month is exempt from tax.
- Ask for meal coupons
You can ask your employer to pay a portion of your salary in form of food coupons. These are liable up to Rs 55/day. Therefore, you can get a part of your salary in form of meal coupons for 22 working days for up to 2 meals which results in around Rs. 26,400/year tax saving.
- Consider purchasing medical insurance for your family
According to section 80D, a salaried individual can claim a deduction of maximum Rs. 25,000 by purchasing medical insurance policy for him/herself as well as for his/her family (spouse and kids). To get the additional benefit, you can also buy medical insurance for your parents and claim Rs 30,000.
- Money under VRS
Public sector employees doing job under the State or Central Government can avail this tax benefit. If such an employee opts for voluntary retirement, then the money he/she receives as a result of VRS is free from tax up to Rs. 5 Lakh.