Ideas to lower income tax
It’s so painful to see the amount of money I end up paying on the name of tax. Presently doing - 1.5L of LIC and pf + 50k NPS + HRA. What else can be done? My CTC is 55LPA.
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Bruh switch to new regime. There's only a certain limit upto which you can practically save in old regime.
There are some loopholes btw. My friend has some connections with the local political leaders. So he donates a good chunk to them, which can be claimed for tax concession and then he takes back that amount in cash from them (with a small % cut). Similar thing can be done with donations to religious institutions
You may utilise the overall 7.5Lakh upper limit slab for the combined deposit of EPF, NPS, Superannuation which can be deducted from your salary. It affects the take home pay but you save in the income tax deduction from your salary itself.
Also, you have partial tax free withdrawal under special circumstances from EPF, NPS after some years, guess it is 5 years or something. You can check this further.
But the best part is your taxable income gets reduced at the company side itself and tax doesn’t get deducted and get deposited with the government for you to file returns and show evidences via this method. Also, the interest is decent enough for time being.
However, you can also explore the option of a taking a small home loan as well if you really want to get that benefit as well. You can reduce 2lakhs from the Home loan option as well.
If your company provides health insurance for yourself and your family and also your parents, just add all the top up that you can possibly do if you don’t have a separate insurance for the same. That also reduces the taxable income.
Exactly. If in new regime, Force your company to pay you like 75% in Basic. Then 12% of that (9%) will directly get contributed to Employer EPF. 10% (Another 7%) will be employer NPS. You will have 16% tax free income within till 7.5L. You will lose benefits like HRA etc though if you get all income in Basic.
HRA may not be missed out imo.
Because generally there are atleast 3 components of the salary. One has to be mandatorily the basic, then comes HRA and then the 3rd one is for others where you have the perks and privileges clubbed or separated based on your company policy.
So even that should reduce your taxable income by atleast 2-4 lakh per Annum.
Get used to it 🤷🏻♂️
Check if your company provides Corporate NPS - it is one of the best tax saving investments that people are generally not aware of.
Best part is that 60% of the amount invested under corporate NPS can be withdrawn at retirement without paying any tax!
Also this is different from the 50k NPS that you are already investing.
Corporate NPS is tier2 NPS?
how are you not saving more in new regime?
Earn less
Donate to political party.
Consult a good CA . There are options like huf .
Health insurance, Sodexo if provided. Practically that's all.