Tips to save income tax on salary
24 August 2023
Tax-saving tips are always welcome, especially for salaried individuals looking for ways to optimise tax planning. Employees can maximise their tax benefits and enjoy more take-home pay with proper tax planning. One method to achieve this is by utilising the tax-saving benefits offered by employers, such as the Sodexo tax savings meal card.
Pluxee, a leading provider of employee benefits, offers meal cards that can help employees enjoy tax-exempt meal benefits. In addition, Pluxee Meal & Benefit Solutions provides various benefits such as meals, fuel, and telecom. Incorporating Pluxee meal & employee benefits into financial management strategies can provide additional perks and tax savings for employess. Along with these, using a tax savings calculator can help employees plan their finances better and optimise tax benefits by providing an estimate of the tax savings that can be achieved through various tax-saving options.
Maximising Your Salary: 10 Tips for Saving Income Tax
Here are ten tips on how salaried employees can save income tax on their salary:
Understanding Tax Slabs and Deductions
Understanding the nitty-gritty about tax slabs and deductions is essential to planning your finances better. Knowing this can help you optimise your taxes and ensure you only pay what is necessary.
Maximising Section 80C Deductions
Section 80C of the Income Tax Act allows for deductions up to ₹1.5 lakhs. Therefore, maximising Section 80C deductions can significantly reduce your taxation.
Tax-Saving Investment Options
Tax-saving investment options like Equity-Linked Savings Scheme (ELSS), Public Provident Fund (PPF), and National Savings Certificate (NSC) can help you save on taxes and generate wealth.
Maximising Benefits Offered by Employers
Employers offer a range of benefits that can help you optimise your tax benefits. For example, Pluxee tax savings meal card/pass provides tax-exempt meal benefits and reduces payroll taxes, potentially saving up to ₹12,000 per year.
Claiming House Rent Allowance (HRA) and Leave Travel Allowance (LTA) Exemptions
Employers offer various benefits, such as tax-exempt meal cards along with HRA and LTA exemptions. Taking advantage of these benefits can lower your taxable income and save on taxes.
Opting for National Pension Scheme (NPS) and Other Pension Schemes
Government-approved schemes like the Sukanya Samriddhi Yojana, Senior Citizens Savings Scheme, and the National Pension Scheme offer tax benefits that can help you save on taxes.
Use a Home Loan to Reduce Taxable Income
The principal amount repaid on a home loan is eligible for a tax deduction under Section 80C, while the interest paid can be claimed as a deduction under Section 24.
Donations Made to Charitable Institutions
Donations made to charitable institutions are eligible for tax deductions. By donating to a cause you care about, you can save on taxes while making a positive impact.
Claiming Deductions for Medical Insurance Premiums Paid
Claiming deductions for medical insurance premiums paid can help you increase your tax savings and reduce the amount of taxes you owe.
Interest Paid on Education Loan
Interest paid on education loans can be claimed as a tax deduction, helping you reduce your taxable income. While tax planning is crucial for all salaried employees, making use of the employees tax benefits like those offered by Pluxee can further optimise your taxes and provide additional benefits. By incorporating the above tips into your financial management strategies, you can maximise your tax benefits and enjoy more take-home pay.
Tax planning is an important aspect of financial management that requires careful consideration and attention to detail. Incorporating these tax-saving tips into financial management strategies can provide individuals and businesses with significant tax savings for employees. Also, utilising a tax savings calculator and investing in employees tax benefits options can help employees plan their finances better.
Moreover, staying informed about the latest tax laws and regulations and seeking professional advice when necessary can help taxpayers make informed decisions that align with their financial goals. Ultimately, effective tax planning can help individuals and businesses achieve financial stability and long-term success.