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POSTED BY ON April 27, 2011 9:44 pm COMMENTS (5)
I am about to shift to a new job and was wondering if i can ask my new employer to make a salary structure which will reduce my tax liability. Can anyone share some tips on how do I go about it. Any uselful resource or links will be great. My employer has included the following components in my breakup.
basic
HRA
special allowance
conveyance
telephone
magazines
food/entertainment
medical
LTA
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Dear Rajat, From your list, please do note, HRA, LTA, Telephone, magzines, Food all ‘ll become taxable as & when DTC is implemented.
Spl. Allowance is already taxable. From your query it’s not clear the position of Gratuity & Leave encashment.
Please reply.
Thanks
Ashal
One more point. Employer‘s contribution to PF up to 12% of the basic is not taxable.
So, if basic is higher, Employer’s contribution to PF also would be higher which means less taxable income.
It’s better to have higher basic in case you are not claiming House Loan Benifit.
In turn your HRA would be more as HRA is calculated based on basic (40% of basic).
This way you can get more tax benefit.
Dear Rajat, ‘ll your employer provide you the correction window in case after implmentation, DTC (may be from 1st April 2013) is not tax friendly to your pay structure.
Thanks
Ashal
I think the lesser the basic the better.
If you are staying in delhi in rented accomodation, then HRA really helps in reducing the tax burden.
I think special alloance and taxable(not sure).
Telephone, magazines, food, medical all get tax rebate if you can show matching receipts.
LTA is something which you need to take a decision, if you would be able to avail as it has elaborate requirements.