- Date : 21/07/2022
- Read: 4 mins
Save tax for salaried individuals!
The deadline to file your ITR is 31st July. You would be wondering how to save on tax. Tax-saving tips are necessary to save your taxes. Remember that money saved is money earned. Earning money is difficult, and you should use tax-free allowances to save on tax. Here we give tips to save income tax for a salaried person in India.
Saving taxes is a process which should be started at the beginning of a financial year. If you start at the right time, there is a good chance you will be able to save on taxes. But don’t worry if you have not started at the beginning of the financial year. Tax saving is a recurring process, and you need to file taxes each year. For next year, you can negotiate your salary breakup to help you save on taxes. Here we discuss five tips and allowances to save your taxes.
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5 Tips to save taxes for salaried individuals
You can add certain allowances to your salary to save on taxes. If you add these allowances to your salary, you can save on tax in India. Here are the five allowances that you can add to save taxes:-
- House Rent Allowance- The house rent allowance can be from 40 to 50% of your basic salary, depending on your city. If you are paying rent, you can save taxes on the rent by making use of the house rent allowance. Adding the HRA benefit will help you save taxes on the rent that you pay on your salary. If your salary does not include an HRA component, you should talk to the company's HR to get it added to your salary.
- Travel allowance or conveyance allowance- This is the allowance that the companies pay to spend on your travel from home to office and vice-versa. If you are not getting a travel allowance, you should get it added to save taxes. This will help you save taxes on travel from and to the office. Also, some companies pay you for your travel through reimbursement. In these cases, you need not pay any tax on the reimbursement, and your reimbursement allowance will not be a part of your CTC.
- Food Coupons- The company gives food coupons to pay you for your meals. If you take the salary as food coupons, you need not pay taxes on the food coupon amount. A total of Rs 50 per meal can be taken as food coupons. You can take food coupons in the form of Sodexo coupons and Paytm food wallet, amongst other options. You can reduce your taxable income by using food coupons.
- Car maintenance allowance- A car maintenance allowance can be used to save taxes. The company can pay a car maintenance allowance of Rs 2700-3300 per month. Thus you can save taxes by claiming this deduction.
- Leave travel allowance- This is the allowance you can avail of twice in a bracket of 4 years to travel. If you travel with your family or alone, you can make use of the allowance to reduce your taxable amount.
Tax saving is an activity that should start at the beginning of a financial year. But it is never too late to start saving taxes, and you can use the five allowances we mentioned above to save on your tax bill if you are a salaried employee. Check these 3 Tax filing apps that can simplify your ITR process
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.