How can I save tax on my salary?

How can I save tax on my salary?

Save Income Tax on Salary

1. Deductions under Section 80C, Section 80CCC and Section 80CCD. Citizens of India can save tax under these 3 sections.
2. Medical Expenses.
3. Home Loan.
4. Education Loan.
5. Shares and Mutual Funds.
6. Long Term Capital Gains.
7. Sale of Equity Shares.
8. Donations.

What is tax free salary?

What is Tax Free Salary? When the employer agrees to pay tax on the Salary paid to the employee without applying any cap on the amount of tax to be paid, it can be said to be a Tax Free Salary.

Is tax deducted from basic salary?

Basic salary is the most important part of your salary slip. Other key tax saving components such as house rent allowance (HRA) and employee provident fund (EPF) contribution is calculated on the basis of your basic salary.

How the salary is calculated?

Here the basic salary will be calculated as per follows Basic Salary + Dearness Allowance + HRA Allowance + conveyance allowance + entertainment allowance + medical insurance here the gross salary 660,000. The deduction will be Income tax and provident fund under which the net salary comes around 552,400 .

Is basic salary taxable?

Basic salary is fully taxable. Basic salary forms the core of the salary structure, constituting for 40-45% of the total CTC. Other salary components like Gratuity, Provident Fund and ESIC are determined according to the basic salary.

How is income tax calculated for a salaried person?

First, as a salaried person you have to calculate the taxable income from your salary because the tax liability is calculated on this figure. Tax is not payable on total income; it is on taxable income.

Are there any tax exemptions for salaried employees?

Salaried individuals below the age of 60 years are eligible to avail various tax exemptions, as specified under Section 80 of the Income Tax Act. Following is a table illustrating the applicability of these income tax exemptions along with their limits:

Do you get tax deductions for your salary?

All income you receive from your job like salary, leave encashment, allowances and so on. Deductions Income tax is not just you paying money to the government. It is also about all the savings you get to do because of the income tax deductions.

What kind of income do you have to pay tax on?

Taxable income is the income on which you need to pay tax which includes all other incomes apart from your salary too. All income you receive from your job like salary, leave encashment, allowances and so on.