Income Tax News: When one hears the word “income tax,” they may feel that it shouldn’t be withheld in some way. Income tax is the largest blow to those in the salaried class. However, investing is your best bet at avoiding this tax. Numerous financial instruments aid in tax savings.
Strategic Financial Tools
Nevertheless, the money does not stay in your pocket in either scenario whether it is invested or taxed. As a result, having these tools is essential to keeping money in your pocket and preventing tax deductions. You will save a significant amount of tax on your salary if you include five such allowances in it. Tell us about five of these allowances that, if included in your pay, would result in significant tax savings.
Food Coupon
Food coupons, meal vouchers, and Sodexo coupons are offered by numerous businesses. It is suitable for eating. Coupons up to Rs 100 can be used every day in this. Additionally, some businesses are crediting it to the Paytm Food Wallet. Coupons fall under the reimbursement heading. The company provides meals for Rs 100 at a rate of Rs 50 every two days. You can profit by Rs 26,400 in this way.
Leave Travel Allowance
Employers provide their staff with Leave Travel Allowance (LTA). This is something you can benefit from when filing your ITR. You are reimbursed for travel expenses incurred while performing your duties. You can take two extended tours in a span of four years. Up to a certain amount, the full cost of this tour is exempt from taxes. This upper limit may match your LTA. By speaking with company HR, you can have your leave travel allowance added to your pay.
Travel or conveyance allowance
The term “transport allowance,” “travel allowance,” or “conveyance allowance” refers to the money awarded for business travel made during regular business hours. You are given this allowance by the company to help with your commute from home to work. Although this allowance is a part of your pay as well, you can avoid paying taxes on it if you treat it as such. It is possible to claim conveyance allowance as reimbursement. This kind of reimbursement is not subject to taxes; in fact, it is not subtracted from the taxable salary.
House Rent Allowance
Most employers offer their staff members a house rent allowance. This represents between 40 and 50 percent of your base pay. When filing an ITR, the amount of the housing allowance is exempt from income tax. If your employer does not provide a house rent allowance in such a case, you can save taxes by speaking with HR.
Car Maintenance Allowance
Employees of many companies receive car maintenance allowances. This covers the driver’s salary, petrol/diesel expenses, and car maintenance for the employee. You can receive a monthly tax exemption from this. This can be interpreted as payment as well. You have the chance to save taxes on a portion of your excess pay with the assistance of this allowance.
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