How to reduce income tax by Rs 35,000 with perks, health cover Sudhir Kaushik of TaxSpanner.com tells readers how they can optimise their tax by rejigging their income and investments
Delhi-based marketing professional Sanjay Khosla earns well, but pays a low tax because his salary structure is fairly tax efficient. But TaxSpanner estimates that there is scope to reduce the tax further by rejigging the salary structure.Khosla should start by asking his company to offer some tax-free perks, such as a gadget allowance, meal coupons and reimbursement of expenses on books, newspapers and periodicals. Under Section 17(2), gadgets bought in the name of the company and given to the employee for personal use are taxed at only 10% of their value. If Khosla buys items like computers, furniture and ACs worth Rs.60,000 in a year, his tax will be reduced by almost Rs.12,000. If he also gets meal coupons worth Rs.22,000 and reimbursement of books and newspaper bills worth Rs.18,000 (Rs.1,500 a month), his tax will come down further byRs.8,000.
He also needs to manage his investments better to reduce the capital gains tax liability. Last year, he made short-term capital gains of Rs.28,000 from his stock investments and paid almost Rs.4,500 as tax. If he holds his equity investments for a longer period (12 months or more), gains of up to Rs.1 lakh in a financial year will be tax-free. Khosla needs to manage his stock investments better to keep the tax liability within the tax-free threshold.
Khosla’s company provides group health cover to him and his parents, but he has also bought a health plan on his own. He should buy an independent health cover for his parents too. A premium of Rs.50,000 will bring down his tax by another Rs.15,600.
WRITE TO US FOR HELP
Paying too much tax? Write to us at etwealth@ timesgroup.com with ‘Optimise my tax’ as the subject. Our experts will tell you how to reduce your tax by rejigging your pay and investments.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Faqs of Insurances
