Taxes are undeniably great, but for those with loads of responsibilities, taxes are a toll! So, do you think you are paying extra taxes? If yes, and want to curtail them then you need to go for proper tax planning. There are several ways in which we can save our taxes but one important thing is that there are several things that we do are actually tax-free. However, we are not aware about them. For instance, insurance investments are tax-free. Thus, to save your taxes all you need to have is a proper planning.
Let’s find out the best tax saving tips for salaried employees :
- Salary Restructuring
Have you ever thought about the expenses you do just because your job demands it? In case if you switch your job right away, you will have to spend money in order to get settled in the new place. For instance, you might have to travel to the office or your client’s office daily just because your job wants you to do so. Moreover, you might also need to read some specific newspapers, magazines or books to fulfill the purpose of your job. These expenses will vanish when you leave the job. This means that these expenses are enforced; therefore your employer needs to pay for them, which shows that you are only a medium these expenses are not a part of your income.
In such situations have a word with your employer and request them to restructure your salary structure. You need to get allowances and perks if you spend money on such things. Ensure that this is not a part of your salary. In order to avail these tax- free allowances, you need to give proof of these expenses. Some of the allowances that will help you to save your taxes are conveyance, telephone and mobile, newspaper, books and magazine, personality development, medical treatment etc. You cannot ask for all of the allowances as some are given based on the grade of the employee.
- Rent Payment
When we get some new job opportunities, there are times when we need to relocate to different city or state. Most of the companies do not offer accommodation; therefore, an individual need to rent out. Thus, we need to know the fact that the expense of paying the rent is taxable as it can be deducted from the income. House Rent Allowance is given by several employers as a part of your salary. But this HRA is deducted from the gross income of the employee. Hence, don’t think that HRA can be used ‘completely’ to save your taxes.
HRA indeed is one of the unbelievable ways to save your taxes, thus, ensure your salary structure comprises of HRA. Always ensure that you get rent receipts from the owner of your house. Also, in case if your yearly rent exceeds 1 lakh then ensure that you submit the copies of, PAN card details of the house owner and lease agreement.
- Medical Expenses
Medical allowance is given to the employees as part of the salary. If you want to make your expenses tax free, you need to bring forth the actual bills of your expenses. Therefore, ensure you collect all the bills of the expenditure made on medicines. Also note that every financial year you can get bills only up to Rs.15,000. You can also submit the receipts of expenditure made on medical expense on the dependents.
Taxes might look like a burden but if planned properly you can save lot of your bucks. Changes in tax and payroll systems can strike in at any time; PayWheel- comprehensive payroll software is set to encounter such changes at all times and continues to ease the HR and payroll operations. If you looking for a fully automated payroll solution that maps all standards of Indian payroll, contact us now!