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TAX PLANNING FOR SALARIES

TAX PLANNING FOR SALARY PACKAGE 

Salary is the income received from the employer. 

If the minimum income exceeded exemption Employer must withhold tax (its mandatory) as a tax deduction in the source (TDS), and provide   a form 16   for its employees, which shows the tax cuts Details and net Income paid.   


Tax planning for the cost of the salary for the company (CTC) and the salary components are divided into Basic DA, HRA, transportation allowance and incentives variable etc. in order to get the maximum tax benefits, the following provisions of the income that are beneficial to the employee tax should be included in the salary 
1) HRA: Account HRA  under articles 10 (13A) of the Income Tax Act, and knows allowance in 1961 as the amount received by an employee by his / her employer pay rent to him / her.  No tax exemption if he was living in the home of his own or a house, which is the non-payment of rent.   calculation of taxable HRA: 
 
Details Amt (rupees). Amt (rupees). The amount received during the year HRA   XXX  exemption under Article 10 (13A)  
Less:  least of the following is exempt:
  1. The actual amount of the house  Rent Allownace
  1. 50% (to Chennai, Mumbai, Calcutta, Delhi) or 40% (anywhere else) of the salary.
  2. Rent paid to house more than 10% of salary *.
XXX  
XXX  XXX  XXX  taxable house allowance Rent   XXX  * Basic salary + = DA (forming part of the interest) + commission on the sale of a fixed exchange rate.   


tax point of human rights law: that the maximum of the Human Rights Act to benefit can be drawn by the presence of all components for 3 above are more or less the same amount. 


Taxless allowances

  1. Custom Search: any grants to encourage academic research and other professional pursuits instead. 
  2. Which provides for the use of computers or laptops. 
  3. Kind gifts reach Rs.5000 exempt. 
  4. Mobile phone charges or fees are not chargeable to tax. 
  5. The amount spent to provide free education facilities and staff taining not taxable.
  6. Food and drinks for free *
  7. Medical facility
  8. The amount of the employer's contribution towards
    • Recognized PF (up to 12% of salary).
    • Approved retirement fund.
    • Group insurance plans.
    • State employees insurance plans.
    • Fidelity Assurance System
  9. Children Education Allowance: Rs.100 / Max's Child 2 Children
  10. Spending down instead of Rs.300 / Max's Child 2 Children
  11. Reimbursement of medical expenses * Max up to Rs.15000 per annum
  12. Increase transport allowance Rs.800 pm (regardless of the amount spent)
  13. Leave travel allowance
Taxable salary income account 

details Amt (rupees). Amt (Rs.)  gross salary income xxxAdd: the value of bonuses for accusing Taxxxx added: profits instead of Salaryxxx  XXX  
Less: Provision to the extent of tax-exempt

  1. House rent allowance *
  2. Leave travel allowance *
  3. Children Education Allowance:   Rs.100 / Max's Child 2 Children


  4. Spending down instead of   
    Rs.300 / Max's Child 2 Children
     

  1. Reimbursement of medical expenses *  
    Max up to Rs.15000 per annum
  2. Increase transport allowance  
    Rs.800 pm (regardless of the amount spent)



Payroll Bangalore – We provide Payroll setup and Payroll Processing Services in Bangalore, India. Call Us : +91 9246536701