Now you can buy life insurance plans completely online right here.
Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
Our representative will get in touch with you at the earliest.
The end of the financial year is near. Many people are now scampering around looking for avenues to claim a refund on paid tax. You may explore various options to reduce your tax liability. The Government of India allows numerous exemptions and deductions under various sections of the Income Tax Act, 1961 to lower your taxable income, and subsequently, your tax liability.
In case you are a salaried employee seeking to save tax, look no more. We have a comprehensive list of tax saving options ready for you.
Submit medical bills on time
The Income Tax Act, 1961 allows medical bills of salaried employees that are reimbursed by their employers to be exempted from tax. You may avail of a maximum of up to INR 15,000 for a financial year by seeking reimbursement of medical bills for self, spouse, and dependent children. You may also submit medical bills of your parents or siblings in case they are wholly dependent on you. Submitting such medical bills reduces your tax liability considerably.
Request for transport allowance as a part of your salary
Employees who do not receive transportation facilities from their employers may seek transport allowance. This type of allowance is offered by employers in order to compensate their employees for their travel to and from their residence to their workplace. Under Section 10(14)(ii) and Rule 2BB of the Income Tax Act, you may avail of an exemption up to INR 1600 per month, which sums up to INR 19,200 per annum. Blind and handicapped employees may seek a maximum of INR 3200 as transport allowance exemption per month.
You may also avail of tax exemption on conveyance allowance used to meet expenditure while performing office duties. Conveyance allowance is exempted up to the extent of expenditure incurred.
Enjoy exemptions under Section 10(14)
Besides transport and conveyance allowance, you may avail of numerous other exemptions under section 10(14). These are exempted to the extent of the expenditure incurred. Some of them include:
Claim exemption for Leave Travel Allowance (LTA)
LTA is offered to employees to cover any sort of travel expenses while on a leave from work. The LTA tax break may be enjoyed only while travelling within India. You may claim this benefit for travel of self as well as family members, which include your spouse, children, as well as parents and siblings who are completely dependent on you. Section 10(5) of Income Tax Act stipulates deductions of Leave Travel Allowance.
LTA is subjected to the following rules:
Avail of tax benefit on children education allowance
In case your employer is offering a perquisite of education facility for your children’s study, you may claim tax benefit up to a certain limit. Fixed education allowance is tax exempt up to a limit of INR 100 per month for a maximum of two children. You may also enjoy tax benefit of up to INR 300 on an allowance that is paid towards hostel fees for a maximum of two children. Additionally, you may also avail of tax deductions for fees paid under Section 80C of the Income Tax Act.
Claim House Rent Allowance
Most employees have House Rent Allowance (HRA) as a component in their salary structure. You may claim HRA as a tax benefit to meet your accommodation-related expenses. You may avail of tax benefits of HRA under Section 10 (13A) of the Income Tax Act.
It is important to note that the entire HRA amount is not always completely exempt from tax. The exemption is a minimum of any of following three:
You may claim HRA tax benefit only for the period during which you have occupied the rented house. It is imperative to submit the rent receipts or the rental agreement in order to avail of exemptions on House Rent Allowance. In case the rent paid is more than INR 1 lakh per annum, which works out to INR more than 8333 per month, it is mandatory to report the Permanent Account Number (PAN) of the property owner while seeking an HRA exemption.
Ask for food coupons
Food in office premises or that provided by the employer is not taxable if the cost to the employer does not exceed INR 50 per meal. Besides, snacks and non-alcoholic beverages provided by the employer during working hours are considered as tax-free perquisites.
Utilize Section 80C to the maximum limit
Some of the best investment options for a salaried person are under section 80C. The good news is that you may claim a maximum of INR 1.5 lakh under this section. You may choose to invest in all or either some of the below-mentioned investment vehicles.
Besides the aforementioned 80C deductions, you may claim benefits through the Sukanya Samriddhi Scheme, Senior Citizens Savings Scheme (SCSS), infrastructure bonds, and National Bank for Agriculture and Rural Development Rural (NABARD) Bonds, among many others.
Buy health insurance
Another option for tax saving for salaried employees is the purchase of medical insurance. For a single financial year, you may claim up to INR 25,000 for mediclaim premiums paid for self, spouse, or dependent children. In case you or your spouse is above 60 years of age, the limit is extended to INR 30,000. You may avail of an additional deduction of INR 25,000 on health insurance premiums paid for your parents. In case either of them is a senior citizen, the maximum limit is pushed up to INR 30,000. You may, therefore, enjoy a maximum deduction of INR 60,000 on premiums paid towards health insurance plans.
If you are a salaried employee, you may consider the aforementioned tips. Doing so will not only reduce your tax liability considerably but also will aid in sound financial planning.
Read Here for More Related Articles:
Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...Know more
Kotak Single Invest Plus is a single premium unit linked plan where, by just paying once, you can reap benefits and also stay protected.Know more
Kotak Single Invest Advantage is a hassle-free unit linked plan, where you invest once and reap the benefits throughout the policy term.Know more