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Avoiding tds on salary

caridade mascarenhas (customer service) (37 Points)

13 August 2013

Hello Everyone,

I am completely zero when it comes to Income tax or TDS so looking forward for some help and advice.

Basically i want to save the TDS deduction on salary

My Salary 18000/- per month

At the same time every month my company pays me Incentives(TIPS) that around 10000/- ( Credited into my Salary Account)

so my monthly income is 28000/- per month

Can you kindly tell me how to save the deduction of TDS from my salary and what type of investments i should have and how much i should invest. I dont want TDS to be Deducted from my salary.

My company has been giving me Form16, but i have never filed returns

Kindly help me

Thanks and regards

Carey

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9 Replies

@VaibhavJ (Believe!! Live your dreams!) (33511 Points)
Replied 13 August 2013

Hi,

Can you share break up of your Gross Salary.

Thanks

1 Like

caridade mascarenhas (customer service) (37 Points)
Replied 13 August 2013

Hello Vaibhav,

My gross salary Break down

Basic 7200

HRA 2160

TR alw 2000

EDCU ALW 1000

ENT ALW 1200

MED ALW 3000

SPL ALW 1440

Total 18000/-

but besides this i also get incentive(TIPS) 10000/- every month, this is not mentioned in my salary slip.

thanks

caridade mascarenhas (customer service) (37 Points)
Replied 13 August 2013

My gross salary Break down

Basic 7200

HRA 2160

TR alw 2000

EDCU ALW 1000

ENT ALW 1200

MED ALW 3000

SPL ALW 1440

Total 18000/-

but besides this i also get incentive(TIPS) 10000/- every month, this is not mentioned in my salary slip.

thanks

@VaibhavJ (Believe!! Live your dreams!) (33511 Points)
Replied 13 August 2013

You can avail exemtion of Travel Allw to the extent of Rs. 9600/ (800 p.m.) & Medical Reimb Rs. 15,000. Pl check with HR whetehr Medi Allowances is the same again which you can submit Medical Bills.

After deducting this your Taxable income is Rs. 3,11,400/- (336000- 9600-15000).

After deductiing 2 Lac exemption your net taxable income is Rs. 1,11,400.

So save on tax by Showing HRA, Investing in LIC & other instruments & obtaining Mediclaim Policy.

By showing rent of Rs. 3000/- pm. you can reduce taxable income by Rs. 25920/.

So remaining taxable income is Rs. 85,480/. which you can save by investing in LIC & other instruments & obtaining Mediclaim Policy.

Thanks

1 Like

Mihir (Wealth Manager) (5293 Points)
Replied 13 August 2013

Basic salary - taxable

HRA - taxable if residing in self-occupied house property

Travel allowance - tax free upto 800/-pm

Education allowance - taxable (check if its child edu allowance)

Entertainment allowance - taxable

Medical allowance - taxable (medical reimbursement is tax-free upto 15,000)

Special allowance - taxable

Incentive - taxable

Taxable income estimated to be Rs. 27,200/- pm or 326,400/- pa

Tax payable Rs. 13,095/- pa or Rs. 1,091/- pm

You can invest in PPF, NSC, pay for life insurance premium, mediclaim premium, etc to save tax.

mayank (CA FINAL) (48 Points)
Replied 13 August 2013

you can also invest in mutual funds which are tax free.

Arun Jain (Account Professional) (479 Points)
Replied 13 August 2013

Hi,

YOu can also claim LTA if your salary has this component. According to my knowledge even if you dont have any LTA component you can claim it. LTA can be claim 2 times every four years block.

you can check the details on internet regarding LTA. For example, 2012 falls in the 2010-2013 block. It can be claim for Spouse , children ( not more than two) , dependent brother & Sister also.

THere are some condition of LTA exemption such as travel should be within the country, its only travel expense that is exemption food, sight seeing, hotel rent are not included.

Thanks