Computation of Total Income

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Manish

Manish (Querist)
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28 May 2011 Supposed my salary is Rs. 1 lac per month how could i reduced my total income?

B R Ramesh

B R Ramesh (Expert)
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28 May 2011 Hi

Section 80C allows a maximum limit of Rs 1 lakh across investments ranging from provident fund, PPF, infrastructure bonds, fixed deposits (5 years or more), NSC, insurance/pension plans, unit linked insurance, equity linked savings scheme etc. It also includes tuition fees of your children and the repayment of principal on your housing loan. The interest component on your home loan has a separate limit of Rs 1.5 lakh. Medical premia upto a maximum of Rs 15,000 qualifies for deduction, with an additional Rs 15,000 for parents.

Start early so that you can do an effective financial plan, along with tax savings and evaluate various investment options.

Some tax savings do not require you to invest, take full advantage of them.

Understand your long-term financial goals, this is the starting point.

Hedge your health/life risks.

You can claim a separate deduction for medical premium of your parents. Understand time frame for contributions, and lock-in periods for investments.

EXEMPTIONS

House Rent Allowance
Minimum of – 1. Actual HRA 2. Rent Paid – 10% of Basic 3. 40a% of Basic (Non-Metros) or 50% of Basic (Metros)

Conveyance Allowance
Rs 800 / Month

Leave Travel Allowance
Two trips in a block of 4 Yrs Amount not exceeding Air Economy or Rail AC I Fare shall be for shortest distance and for a single destination

Medical Reimbursement
Rs 15,000 / Annum
for more details contact local tax consultant to avoid excess deduction of TDS from the co.

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