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Need help with my income tax savings

saneesh veetil (Inside sales exec) (24 Points)

30 August 2012

Hello Guys,

Can anyone help me on how I could save tax on my salary? Below shown is my salary break up.

Basic Salary 7,000.00

House Rent Allowance 5,600.00

Medical Allowance 1,500.00

Conveyance Allowance 1,500.00

Special Allowance 16,300.00

Communication 1,500.00

LTA 583.00

Monthly Total 33,983.00

Provident Fund (Employer) 10,080.00

Yearly Gross 4,17,880.00

Mediclaim Insurance 2,120.00

Cost to the Company (CTC) 4,20,000.00

Additional Information: I have an educational loan of 9 lakhs and I have already clear 3 lakhs.

I am total newbie to this segment so please be elaborate on your suggestion/ solutions

Thanks in advance. Look forward to hear from you guys.

-Saneesh Veetil

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2 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 30 August 2012

as the data is related to previous year, get form 16 from employer, he has made deduction of tax appropriately, you have to just follow the same.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 05 September 2012

Dear Saneesh, given below is the calculation of your taxable salary.

Basic Salary		7000
HRA		5600
Medical Allowance		1500
Conveyance Allowance		1500
Special Allowance		16300
Communication		1500
LTA		583
total		407796	Yearly
Less: Exempt Allowances
Medical Allowance	-15000
Conveyance Allowance	-9600	-24600
		383196
Less: Prof Tax Paid		-2500
Total Taxable Salary		380696

the medical allowance & conveyance allowance would be exempt to the extent specified. You could also save tax on the following:

1}. You are receiving HRA, so if you are staying in a rented house you can claim exemption for the Rent paid. HRA is calculated by taking 40% of the basic salary, HRA received & rent paid in excess of 10% of Basic Salary. From these three the least amount is exempt from the HRA received.

2]. You have taken education loan. So the total interst paid on this loan during the previous year will be deducted u/s 80E from your taxable income. please take a certificate from the bank for the interst paid by you.

3]. Is the medical insurance mentioend is paid by you or by the company. If it is paid by you then you would get deduction u/s 80D to the amount paid subject to limit of Rs 15k.

4]. You would also get the deduction for the PF deducted by the empoyer from your salary. This figure would be available in your Form16.

Are there any other investments made by you such as investments in PPF, FD, ULIP. You would also get a deduction subject to an overall limit of Rs 1lacs u/s 80C.