Payment of the income tax often constitute a substantial amount of income outflow for salaried individuals in the country.
While salaried persons having an annual income of less than Rs 2.5 lakh are exempted from paying tax, those with an income of between Rs 2.5 lakh to Rs 5 lakh pay 5 percent as tax.
If you are having an income of Rs 5 lakh to Rs 10 lakh, pay 20 percent as tax. However, there are different ways by which salaried persons can lessen the amount they pay as tax.
Different methods that can be employed to lighten your tax burden:
Reimbursement of telephone and internet expenses
Exemption is allowed for the payment of telephone and postpaid mobile phone bills for salaried persons. While the benefit was earlier limited to official use, now all can use this exemption.
Another way for saving money is availing the benefits of leave travel allowance (LTA). One can claim reimbursement on expenses that were made as part of their travel. This benefit can be availed for close family members also.
Salaried personals living in a rented house can claim HRA (House Rent Allowance) to lighten their tax burden. While the LTA is taxable, when subjected to certain rules, they can be either fully or partially exempted from tax payment.
Another way is to use meal voucher for buying food. By doing so, individual can reduce yearly taxable income by up to Rs 36,000.
Other ways to decrease your tax burden include getting reimbursement on purchase of books, newspapers, periodicals etc. Individuals can also claim reimbursement for their day to day commuting to work. This can be done by claiming reimbursement for costs incurred on fuel and driver’s salary while operating your own vehicle.