# 0 – Your basic income tax exemption – Rs 250,000
I would not discuss much about this as it is basic exemption.
# 1 – Claim 80C Exemption for Rs 150,000
Following are the eligible deductions u/s 80C.
Children tuition fees. No transport allowance / term fees is allowed as
deduction.
Amount deposited in Public Provident Fund. You can open PPF account with
any post office / SBI / ICICI Bank etc.,
Amount contributed towards the Employees Provident Fund (EPF)
Post office term deposit for 5 years / Bank FD scheme of 5 years.
National Saving Certifications (NSC) – 5 years and 10 years
ELSS tax saving Mutual Funds.
Senior Citizen Savings Scheme from post office / bank
Principal repayment of Home Loan amount
National Pension System / New Pension Scheme (NPS)
Life Insurance Premium
Amount deposited in Sukanya Samriddhi Account
2) Claim additional deductions under 80CCD towards NPS Rs 50,000
Employees can contribute to New Pension Scheme / National Pension Scheme (NPS)
up to 10% of their salary. In such case, an employee is eligible to claim additional Rs
50,000 tax benefits over and above 80C. Hence max limit 80C + 80D would be Rs 2
Lakhs.
3) Employer contribution of NPS – Rs 100,000
Many employers are willing to help employees by contributing to schemes like NPS
where employees would get tax exemption. Have you checked with your employer
whether they can contribute to NPS and deduct from your total CTC (Cost to the
company)? They can contribute up to 10% of your salary. This is a good way to claim
tax exemption and get the highest interest rate with this safe investment scheme.
4) Claim interest on house property loan upto Rs 200,000
If you have taken house loan, you are eligible to claim interest on home loan (which
is termed as loss from house property) up to Rs 2 Lakhs. This is only interest from
housing loan. You can fulfill your dream as well as get income tax exemption.
5) Exemption of Transport Allowance for Rs 19,200 per annum
From next financial year 2015‐16, the transport allowance exemption has been
increased to Rs 1,600 per month / Rs 19,200 per annum. You need not produce any
proofs for this, but just claim as an exemption.
6) Exemption for Health insurance premium up to Rs 25,000
You can subscribe to a good health insurance plan and claim health insurance
premium exemption up to Rs 25,000 per annum. This would satisfy your basic need of
having a health insurance plan and also ensures that you claim relevant tax benefits.
7) Medical allowance – Rs 15,000
You can submit medical bills to your employer and claim upto Rs 15,000 as medical
allowance as part of your total compensation (CTC). In case your employer does not
allow for this deduction, you can claim this amount as exemption while filing income
tax returns and claim as exemption.
8) Medical insurance premium for parents – Rs 30,000
You can claim the medical insurance premium for your parents as exemption upto Rs
30,000. Due to increase of the cost of medical expenses, one has to mandatorily buy
a good health insurance for their parents. There is no choice, but you can claim this
as an exemption from your total taxable income.
9) Leave Travel Allowance – Rs 25,000
Many of us tend to ignore this LTA (Leave Travel Allowance) which one can spend and
claim exemption up to Rs 25,000. While there is a guideline that you can claim LTA
twice in a period of 4 years, you can claim upto Rs 50,000 as one time in a 2 year
period, hence an allocation of Rs 25,000 per annum is done here. Note that this
amount would depend on the employer and may change from employer to employer.
Below are some of the tax free allowances / perquisites which employers are
providing these days. They would depend on an employer to employer. You can claim
to maximum extend to enjoy tax benefits.
10) Fuel expenses reimbursement upto Rs 100,000
Many employers provide fuel expense reimbursement for their employees depending
on their grade. While at junior level, it may be at Rs 30,000, for employees who are
earning above Rs 10 Lakhs per annum, employers are providing Rs 1 Lakh fuel
expenses at a minimum. I have not considered any car schemes here, and this is
simply fuel expense reimbursement which could be based on actual.
11) Phone / Mobile expenses reimbursement – Rs 30,000
Many employers provide reimbursement of phone and mobile bills to the tune of Rs
30,00 per annum as part of the CTC structure. I heard in some companies, it is over Rs
50,000 per annum. I have considered Rs 30,000 on the conservative side.
12) Newspaper / Magazine reimbursements – Rs 14,000
Many employers are giving reimbursements of newspaper / magazine to the extent of
Rs 14,000 per annum for senior employees earning over Rs 10 Lakhs per annum. Some
companies are restricting only to magazine cost reimbursement. One can claim this
as part of their CTC. I have taken this average after inquiring with some of my friends
who are working in MNC and large companies.
13) Meal Coupons / Sodexo coupons – Rs 12,000
Many MNC companies are providing Sodexo coupons as part of their CTC structure. If
you are not encashing such perquisites provided by your employers, you are missing
something and paying unnecessary taxes. I have taken this amount on the low side as
some are providing this as just Rs 1,000 per month, but some MNC companies are
providing Rs 3,000 per month.
Thank You
I would not discuss much about this as it is basic exemption.
# 1 – Claim 80C Exemption for Rs 150,000
Following are the eligible deductions u/s 80C.
Children tuition fees. No transport allowance / term fees is allowed as
deduction.
Amount deposited in Public Provident Fund. You can open PPF account with
any post office / SBI / ICICI Bank etc.,
Amount contributed towards the Employees Provident Fund (EPF)
Post office term deposit for 5 years / Bank FD scheme of 5 years.
National Saving Certifications (NSC) – 5 years and 10 years
ELSS tax saving Mutual Funds.
Senior Citizen Savings Scheme from post office / bank
Principal repayment of Home Loan amount
National Pension System / New Pension Scheme (NPS)
Life Insurance Premium
Amount deposited in Sukanya Samriddhi Account
2) Claim additional deductions under 80CCD towards NPS Rs 50,000
Employees can contribute to New Pension Scheme / National Pension Scheme (NPS)
up to 10% of their salary. In such case, an employee is eligible to claim additional Rs
50,000 tax benefits over and above 80C. Hence max limit 80C + 80D would be Rs 2
Lakhs.
3) Employer contribution of NPS – Rs 100,000
Many employers are willing to help employees by contributing to schemes like NPS
where employees would get tax exemption. Have you checked with your employer
whether they can contribute to NPS and deduct from your total CTC (Cost to the
company)? They can contribute up to 10% of your salary. This is a good way to claim
tax exemption and get the highest interest rate with this safe investment scheme.
4) Claim interest on house property loan upto Rs 200,000
If you have taken house loan, you are eligible to claim interest on home loan (which
is termed as loss from house property) up to Rs 2 Lakhs. This is only interest from
housing loan. You can fulfill your dream as well as get income tax exemption.
5) Exemption of Transport Allowance for Rs 19,200 per annum
From next financial year 2015‐16, the transport allowance exemption has been
increased to Rs 1,600 per month / Rs 19,200 per annum. You need not produce any
proofs for this, but just claim as an exemption.
6) Exemption for Health insurance premium up to Rs 25,000
You can subscribe to a good health insurance plan and claim health insurance
premium exemption up to Rs 25,000 per annum. This would satisfy your basic need of
having a health insurance plan and also ensures that you claim relevant tax benefits.
7) Medical allowance – Rs 15,000
You can submit medical bills to your employer and claim upto Rs 15,000 as medical
allowance as part of your total compensation (CTC). In case your employer does not
allow for this deduction, you can claim this amount as exemption while filing income
tax returns and claim as exemption.
8) Medical insurance premium for parents – Rs 30,000
You can claim the medical insurance premium for your parents as exemption upto Rs
30,000. Due to increase of the cost of medical expenses, one has to mandatorily buy
a good health insurance for their parents. There is no choice, but you can claim this
as an exemption from your total taxable income.
9) Leave Travel Allowance – Rs 25,000
Many of us tend to ignore this LTA (Leave Travel Allowance) which one can spend and
claim exemption up to Rs 25,000. While there is a guideline that you can claim LTA
twice in a period of 4 years, you can claim upto Rs 50,000 as one time in a 2 year
period, hence an allocation of Rs 25,000 per annum is done here. Note that this
amount would depend on the employer and may change from employer to employer.
Below are some of the tax free allowances / perquisites which employers are
providing these days. They would depend on an employer to employer. You can claim
to maximum extend to enjoy tax benefits.
10) Fuel expenses reimbursement upto Rs 100,000
Many employers provide fuel expense reimbursement for their employees depending
on their grade. While at junior level, it may be at Rs 30,000, for employees who are
earning above Rs 10 Lakhs per annum, employers are providing Rs 1 Lakh fuel
expenses at a minimum. I have not considered any car schemes here, and this is
simply fuel expense reimbursement which could be based on actual.
11) Phone / Mobile expenses reimbursement – Rs 30,000
Many employers provide reimbursement of phone and mobile bills to the tune of Rs
30,00 per annum as part of the CTC structure. I heard in some companies, it is over Rs
50,000 per annum. I have considered Rs 30,000 on the conservative side.
12) Newspaper / Magazine reimbursements – Rs 14,000
Many employers are giving reimbursements of newspaper / magazine to the extent of
Rs 14,000 per annum for senior employees earning over Rs 10 Lakhs per annum. Some
companies are restricting only to magazine cost reimbursement. One can claim this
as part of their CTC. I have taken this average after inquiring with some of my friends
who are working in MNC and large companies.
13) Meal Coupons / Sodexo coupons – Rs 12,000
Many MNC companies are providing Sodexo coupons as part of their CTC structure. If
you are not encashing such perquisites provided by your employers, you are missing
something and paying unnecessary taxes. I have taken this amount on the low side as
some are providing this as just Rs 1,000 per month, but some MNC companies are
providing Rs 3,000 per month.
Thank You
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