ITR New Update: There are hundreds of such sections and sub-sections in the Income Tax Act, under which you can save tax. Apart from 80C, interest paid on home loan is exempted in 24B and 80EE. You can also get tax exemption by making education loan under 80E and donating to organizations eligible under 80G. There is a provision of tax exemption under many rules in your salary itself.
If you are employed, then your salary (salary) includes many such options (perks), which can be helpful in reducing the tax burden. Of these, some options require full payment of tax, while there are 10 such options which come under tax exemption. In such a situation, every employed person should pay attention to whether he is able to take advantage of the facilities provided by the company or not.
1. Employees’ Provident Fund (EPF)
According to the EPF Act, the company invests 12 percent of the basic salary and allowances of the employee in EPF. The company also has to invest the same amount. The employee’s contribution is tax exempt, which is up to Rs 1.5 lakh. This exemption is available under section 80C of the Income Tax Act. Interest earned on this also comes under the purview of tax exemption.
2. Leave Travel Allowance (LTA)
For the employees to travel anywhere in the country with their family, companies provide Leave Travel Allowance, which is tax exempt. This discount is available only on travel by train, airplane or public transport. In this, the shortest distance to reach the destination is made the basis. This part of the salary can be deposited by the employee by depositing the booked ticket with the company. This benefit is available only if you travel twice in four calendar years.
3. House Rent Allowance (HRA)
This part of the salary is given to the employee in lieu of payment of house rent. To get tax exemption on this, it is necessary that it should be part of the salary. You can claim tax exemption on the amount received for HRA with the specified limit.
4. Car Maintenance Allowance
Bank Re-imbursement can be claimed up to a limit on the cost of the car, as per the market. You can also get tax exemption on this. However, it depends on whether the car belongs to the company or the employee. This reimbursement is available for some special office work and many personal work.
Most of the multinational companies give food coupons for food and drink during the work in the food coupon office. One can get tax exemption of up to Rs 50 on one meal. Twice a day for 22 working days in a month can avail tax exemption of up to Rs 26,400 annually.
6. Children Education Allowance
In lieu of payment of fees for the child, companies pay an education allowance of Rs 1,200 annually or Rs 100 per month to the employee. This facility is available for two children only. In addition, one can claim tax exemption on payment of tuition fees under Section 80C of the Income Tax Act.
7. Discount on Hostel Expenses
Companies give hostel expenditure allowance to their employees. Under this, the employee gets an annual allowance of Rs 3,600 or Rs 300 per month on the hostel expenses of the child, which is tax-exempt. This discount is available for maximum 2 children only.
8. Phone Bill Re-imbursement
This includes both telephone and mobile phone bill re-imbursement. Telephone charges including broadband internet connection are covered under this. Some companies provide this facility to their employees, which comes under the purview of tax exemption.
9. Uniform Allowance
The employees get this allowance for the maintenance of their uniform while on duty. You can also get tax exemption on the expenses incurred in the purchase and maintenance of the uniform.
10. Gift Voucher
Companies sometimes give gifts to their employees, on which tax exemption is available. However, the condition in this is that its total value does not exceed Rs 50,000 annually, only then can you get tax exemption.