A person named Priyanka Gupta residing in kolkata pays almost 6% of her gross income in tax, but there is a way to reduce it further. It is estimated that if her structure of pay is jigged and she put more of her income in NPS and the tax outgo come down to almost Rs. 28,000. Therefore, like the other companies, her employer does not offer the compliance of twisting the structure of pay.
Gupta should ask for a reduction in special allowance rather than the company should put 10% of her basic pay in the NPS under Sec 80CCD(2d). In the NPS , if Rs. 49,800 is put then the tax will reduce by approximately Rs 10,250, but this will reduce her home pay.
The other thing which is required for her to do is to make changes is 1 Lakh and put the remaining balance in the NPS under the Sec 80CCD(1b). This will cut her tax by Rs. 10,300. Showing that she has no equity exposure, she can even consider it by replacing the PPF with an ELSS fund.
Gupta should also buy a health insurance which covers her and her parents. A policy that may cost Rs. 36,000 a year which will reduce tax by approximately Rs. 7,400.
Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.
With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.
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