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Increase Take Home Salary

 

Increase in-hand salary

Benefits such as leave travel allowance (LTA), medical and conveyance allowances serve two purposes.One, they increase the net takehome salary. Two, they make the salary structure more tax-efficient.However, the limitation is that there are caps on most of these perks.

 

 For instance, you can claim up to a maximum of `15,000 every year for medical reimbursements, `26,400 for food coupons, `5,000 as annual gifts and `19,200 as travel allowance on a yearly basis.Also, keep in mind that you will have to produce original bills and receipts to claim some of these expenses. So, make sure they are within the claimable limit.

 

Take advantage of perquisites if you are planning to buy a car or join a professional course while working. Rather than taking a loan, if your employer funds the expense and includes it as a part of your CTC, your tax outgo can reduce significantly. This is because you are taxed only on the perk value. For instance, if you plan to buy a `6 lakh car on loan, you will have to pay roughly a monthly EMI of `13,000 for five years, which will be a post-tax expense. The tax outgo over five years on `7.8 lakh will be slightly more than `2 lakh.

 

However, if the company shows it as a perk, you are taxed only for the perk value of the car, which is between `1,800 a month (for cars of up to 1600 cc) and `2,400 a month (for cars bigger than 1600 cc). The only disadvantage is that, legally, you don't own the car. But when you quit, you may request the company to allow you to buy the vehicle at depreciated cost.

 

This rule holds true for other big ticket expenses like laptop, gadgets, except in case of rented accomodation. When it comes to a `company leased house versus self rented accommodation', HRA wins. This is because rather than getting a tax-exemption for HRA, a prerequisite value (rent paid or 15% of the basic, whichever is lower) will get added to your taxable income, which would mean a higher tax bill.

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1. BNP Paribas Long Term Equity Fund

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3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

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