A person is taxed more than 7 % of his annual income due to his combination of tax disorganized and poor tax planning. The person can reduce his tax by almost Rs. 50,000 by minor charges in his salary structure and additional investments.
As the first step, he should ask his employer to reduce his allowances and give him certain perks which are tax free on submission of his actual bills. If he obtains a reimbursement for his conveyance, newspaper and telephone bills worth Rs. 78,000 then his tax reduces by Rs. 16,000. He should even ask for 10% of his basic pay to be put in the NPS. If 36,000 is put in the NPS then Rs. 7,300 is reduce from his tax.
Under Sec 80C, he does not account for full Rs. 1.5 Lakh deductions. He should open a PPF account and start a SIP in an ELSS fund. He can even invest Rs. 82,000 in these two options which will help him to reduce his tax approximately to Rs. 17,000. The tax outgo can help him to reduce more tax if he invest further Rs. 50,000 in the NPS Sec 80CCD(1b). This will help him to reduce his tax to Rs. 10,300. Therefore, NPS will only close up his money when he turns the age of 60 years.
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.
Write a comment
Your email adddress will not be published. Required fields are marked