Gurugram-based finance professional Sanjana Mehra pays a low tax, but it can be reduced further. TaxSpanner estimates that Mehra can reduce her tax liability by more than Rs.40,000 if her company offers tax-free perks, if she opts for the NPS benefit, and buys health insurance for her senior citizen parents. Mehra should start by opting for the NPS benefit through her company.
Under Section 80CCD(2), up to 10% of basic salary put in the NPS is taxdeductible, but Mehra is not aware of this. She invests in the NPS on her own, not through her employer. “The HR told us about the NPS, but did not fully explain the tax benefits,” she says.
If her company puts Rs.4,450 (10% of her basic pay) in the NPS every month, Mehra’s annual tax will reduce by more than Rs.11,000.
Mehra does not get many tax-free allowances. The only tax-free perk is telephone allowance of Rs.1,250 per month. She should ask her company for some more tax-free perks, such as meal coupons, newspaper reimbursements and LTA.
If she gets meal coupons worth Rs.24,000, newspaper reimbursements of Rs.12,000 (Rs.1,000 per month) and LTA of Rs.50,000, her tax will come down by almost Rs.18,000.
Mehra and her parents are covered by group health insurance from her employer. As the cover is low (Rs.5 lakh), she has bought health insurance for herself. If she buys a separate cover for her parents as well, her tax will come down.
An additional premium of Rs.35,000 for health insurance for her parents will cut her tax by Rs.7,280….Read More
Source By: economictimes
