1. #1
    Unregistered

    Salary break up with tax benefit?

    I have recently joined a new company and my annual package is 7 lakh. Employers are ready to pay me the break up which I propose. Will you please tell me the best break up which gives benefit in Tax related issue.

  2. #2
    Puru Thaman Array
    Join Date
    Jul 2012
    Location
    CHENNAI
    Posts
    638

    Re: Salary break up with tax benefit?

    haI,


    _)_ Salary Breakup can be Made By Analyzing the Following Factors_)_



    1.Salary Module for Junior Employees


    • For all junior employees, the salary and perquisites module should be very simple and easy to implement_)_

    • Except transport allowance, just add all payments to salary income_)_

    • Do not give medical reimbursements – let it be added with salary or grant theme medical allowance so as to save FBT_)_

    • Pay zero FBT in respect of payments to junior employees and thus let 'gross salary' be taxed in their hands

    • Still most of them will not pay any income-tax because their taxable Income will be below Rs.1 to 1.35 lakhs (after tax deduction under section 80C).


    2.Salary Module for Middle Level Executives


    The theme: Mix and match FBT


    a)Instead of making payment of 'salary', the total emoluments can be bifurcated so as to suffer a little tax by the employee on perquisites but very less FBT.



    b)Consider the following in drafting this module:


    •Transport Allowance.

    •MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM

    •FOOD COUPONS

    •LTA AS PER LAW.



    3.Salary Module for Senior Level Executives



    a)The theme: A little more pain to bring lower perquisite taxation and increase FBT payout which may be considered in CTC



    b)Consider the following:


    •Transport Allowance.

    •MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM

    •FOOD COUPONS

    •Reimbursements of food expenses in club/hotel

    •HRA OR RENT FREE ACCOMODATION

    •LTA AS PER LAW.

    •UNIFORM ALLOWANCE

    •REIMBURSEMENT OF CAR EXPENSES OR CONVEYANCE ALLOW



    BY APPLYING THESE U CAN WORKOUT THE BREAKUPS AT DIFFERENT LEVELS





    _)(_Thanks_)(_

  3. #3
    Ravi Kiran Mohapatra Array
    Join Date
    Jul 2012
    Posts
    175

    Re: Salary break up with tax benefit?

    Salary break up with tax benefit:

    The components for salary are : basic(fixed)+variable pay(linked to performance)

    So the basic is usually pre determined. but variable can be of many types personal allowance, food coupons, Leave travel allowance etc.

    To get maximum tax exemption-> you should apply for HRA exemption.
    ->take food coupons if your company provides.
    ->save upto 1lac per annum so that it comes under sec 80-d(LIC, NAC , Mutual Funds, FD etc)
    ->buy vehicle or any accessories by EMI. So that things wont come under the taxable income.

    Also pay some tax so that govt can build infrastructure. Have a bright future.

  4. #4
    Angel Shweta Array
    Join Date
    Jul 2012
    Posts
    53

    Re: Salary break up with tax benefit?

    Companies gives break up on CTC(amount spend on the employee) options.
    CTC is categorized under the following from which the employee is free to choose his break up:
    *Basic Salary
    *House Rent Allowance
    *Supplementary Allowance
    *Company's Contribution to
    *Provident Fund/Gratuity
    *Company's Cost on various perks
    *Child Education and Hostel
    *Allowance
    *Transport Reimbursement
    *Lunch Coupons
    *Medical Reimbursement
    *LTA Reimbursement
    *Car & Driver Reimbursement.

    Transport reimbursement,house rent,etc are some which helps in minimizing tax.
    The best break up is the Provident fund and Basic salary. These two available break ups reduces the tax deduction and also help to utilize your salary. Also invest in education loan and fixed deposits,they too can bring gain.

  5. #5
    u.shankar Array
    Join Date
    Jul 2012
    Posts
    44

    Re: Salary break up with tax benefit?

    the salary break up with tax benefit is . ex.conveyance, books & periodicals includes HRA Conveyance and PF contribution ,individual Deductions will include medical insurance 56.33 etc. and up to what extent employee will get tax benefit under each component. can any body enlighten me on this issue

  6. #6
    Raajkumar Array
    Join Date
    Jul 2012
    Posts
    213

    Re: Salary break up with tax benefit?

    Till 2 lakhs there is no tax beyond that you need to pay tax.
    You can invest 1 lakh in 80D and if you have availed any insurance then it will com under 80C.
    Take food coupouns offered by your company.
    Apply for HRA and get the tax benefits.
    Medical allowances,
    Money spent on childrens education.

  7. #7
    G.one Array
    Join Date
    Jul 2012
    Posts
    677

    Re: Salary break up with tax benefit?

    Hi guest,first heartly congrats for the new job. Tax amount can be reduced Utilising various deductions allowed under the Income Tax Act, to the maximum.Allocating the CTC amount to various tax -deductible reimbursements like transport, lunch coupons,etc.You must take a life insurance to avail expemption in 80 C. And you can avail the deduction by getting reimbursement of following expenses from the company.Transport expenses maximum Rs.9,600 Lunch coupons Maximum Rs.15,600 Medical expenses maximum 15,000. Thanx.

  8. #8
    reshuthakur Array
    Join Date
    Jul 2012
    Posts
    89

    Re: Salary break up with tax benefit?

    Salary break up with tax benefit:
    the salary break up with tax benefit is . ex.conveyance, books & periodicals includes HRA Conveyance and PF You can invest 1 lakh in 80D and if you have availed any insurance then it will com under 80C.Apply for HRA and get the tax benefits,,
    pay some tax so that govt can build infrastructure. Have a bright future...

  9. #9
    Srushti Array
    Join Date
    Jul 2012
    Posts
    87

    Re: Salary break up with tax benefit?

    You can invest 1 lakh in 80D and if you have availed any insurance then it will com under 80C.
    Take food coupouns offered by your company.
    Apply for HRA and get the tax benefits.
    For all junior employees, the salary and perquisites module should be very simple and easy to implement

    Except transport allowance, just add all payments to salary income

    Do not give medical reimbursements – let it be added with salary or grant theme medical allowance so as to save FBT

    Pay zero FBT in respect of payments to junior employees and thus let 'gross salary' be taxed in their hands


  10. #10
    GURUDUTTA Array
    Join Date
    Jul 2012
    Posts
    118

    Re: Salary break up with tax benefit?

    HI FRIEND....

    Tax amount can be reduced Utilising various deductions allowed under the Income Tax Act, to the maximum.Allocating the CTC amount to various tax -deductible reimbursements like transport, lunch coupons,etc.You must take a life insurance to avail expemption in 80 C.the salary break up with tax benefit is . ex.conveyance, books & periodicals includes HRA Conveyance and PF contribution ,individual Deductions will include medical insurance 56.33 etc. and up to what extent employee will get tax benefit under each component.
    Transport reimbursement,house rent,etc are some which helps in minimizing tax.
    The best break up is the Provident fund and Basic salary. These two available break ups reduces the tax deduction and also help to utilize your salary. Also invest in education loan and fixed deposits,they too can bring gain.

    ALL THE BEST!!!!

  11. #11
    Ashok Array
    Join Date
    Jul 2012
    Posts
    2,293

    Re: Salary break up with tax benefit?

    ~~Hello~~


    To get maximum tax exemption:-

    ~take food coupons if your company provides.
    ~basic salary
    ~you should apply for HRA exemption.
    ~buy vehicles or other accessories by EMI.
    ~child education and hostel
    ~medical allowances
    ~house rent allowances
    ~supplementary allowances
    ~provident fund
    ~house rent
    ~education loan
    ~fixed deposits

    are some which minimize taxes.
    The best break is the basic salary and provident fund.These two available break ups reduces the tax and also helps to utilize salary.


    Thanks!!!

  12. #12
    Boss Array
    Join Date
    Jul 2012
    Posts
    1,649

    Re: Salary break up with tax benefit?

    Wage divide with tax benefit:
    the wage divide with tax break is . ex.conveyance, books & periodicals includes HRA Conveyance and PF you'll invest one large integer in 80D and just in case you have got availed any insurance then it'll com underneath 80C.Apply for HRA and find the tax edges,,
    pay some tax in order that govt will build infrastructure. Have a bright future...

    first heartly congrats for the new job. Tax quantity is reduced Utilizing numerous deductions allowed underneath the taxation Act, to the most.Allocating the office quantity to numerous tax -deductible reimbursements like transport, lunch coupons,etc.You must take a insurance to avail exemption in eighty C. And you'll avail the deduction by obtaining compensation of following expenses from the corporate.Transport expenses most Rs.9,600 Lunch coupons most Rs.15,600 Medical expenses most fifteen,000.

    You can invest one large integer in 80D and just in case you have got availed any insurance then it'll com underneath 80C.
    Take food coupons offered by your company.
    Apply for HRA and find the tax edges.For all junior workers, the wage and perquisites module need to be easy and easy to implement

    Except transport allowance, add all payments to wage financial gain

    Pay zero FBT in respect of payments to junior workers and therefore let 'gross salary' be taxed in their hands

    Do not provide medical reimbursements � let or not it's extra with wage or grant theme medical allowance thus on save FBT

  13. #13
    manju Array
    Join Date
    Aug 2012
    Location
    bangalore
    Posts
    108

    Re: Salary break up with tax benefit?

    Dear friend..
    First congrats for the new job..You can invest 1 lakh in 80D and if you have availed any insurance then it will come under 80C.Take food coupouns offered by your company.but till 200 lack you will not be able to pay tax..Apply for HRA and get the tax benefits.Medical allowances,Money spent on childrens education. etc...

  14. #14
    sweetyilu Array
    Join Date
    Nov 2012
    Posts
    113

    Re: Salary break up with tax benefit?

    hi friends...

    To get maximum tax exemption:-


    1)
    fixed deposits
    2house rent
    3)buy vehicles or other accessories by EMI.
    4)child education and hostel
    5)
    education loan
    6)house rent allowances
    7)supplementary allowances
    8)provident fund
    9)
    )you should apply for HRA exemption.
    10)medical allowances
    11)basic salary

    are some which minimize taxes.


    regards

    venki

  15. #15
    varshu Array
    Join Date
    Jan 2013
    Posts
    240

    Re: Salary break up with tax benefit?

    hello friends...

    1)House Rents

    2)Child Education

    3)House rent allowances

    4) Supplementary allowances

    5)provident fund

    6)Basic salary

    7)Medical Allowances

    are some which minimize taxes

    best of luck

+ Reply to Thread

Similar Threads

  1. How to become Sales Tax or Income Tax Officer? Information about Age limits?
    By Unregistered in forum Professional Discussions
    Replies: 13
    Last Post: 15-09-2013, 11:51 PM
  2. Can I break the Bond with a newly joined company?
    By Puru Thaman in forum Professional Discussions
    Replies: 49
    Last Post: 28-05-2013, 01:01 PM
  3. How to reduce the Income Tax being charged from my salary?
    By Unregistered in forum Professional Discussions
    Replies: 23
    Last Post: 11-12-2012, 10:20 PM
  4. Is it better to join TCS and then break the bond period?
    By Unregistered in forum Professional Discussions
    Replies: 40
    Last Post: 06-12-2012, 07:39 PM
  5. Replies: 12
    Last Post: 30-09-2012, 09:57 PM