How Planning your Investments can increase your Take Home Salary?

You can claim tax-free Leave Travel Allowance aka LTA twice in a span of four years and save tax by submitting your travel and lodging bills.

With an eye on the 2019 parliament and state assembly elections, Maharashtra announced a New Year bonanza on Tuesday: It would implement the 7th Pay Commission's recommendations for all government employees. PTI Photo/ File

New Delhi: The current financial year will conclude on 31^st March 2019, and the beginning of FY2019-20 will again require the salaried class to declare investments by filling Form 12BB. It is on the basis of your investment planning or declaration at the beginning of the year via Form 12BB that your employer will estimate the amount of Tax Deducted at Source i.e. TDS. If you plan your investments and declare expenses like house rent, etc prudently in this form, then your TDS can reduce considerably, making your take home salary portlier than otherwise. House Rent Allowance (HRA) The first head that shows under Form 12BB is HRA. You need to furnish details of your landlord along with his/her Permanent Account Number, address of the property and rent paid by you. If you are residing in a rented accommodation, then the HRA component of your salary becomes tax free, and hence reduces your TDS. Leave Travel Allowance (LTA) Did you know your travel exploits can help you reduce your taxable income? You can claim tax free Leave Travel Allowance aka LTA twice in a span of four years and save tax by submitting your travel and lodging bills. Interest on Borrowing Interest to be paid on any borrowings or loans from financial institutions, your employer or other lenders can be declared in advance to claim deductions on the amount payable. Deduction under Chapter VI-A The last part of Form 12BB is your investments. Plan this part well, and furnish details of investments you wish to make in the upcoming financial year that can be claimed for tax exemption under section 80C, 80CCC, and 80CCD. You must also furnish details of any education loan to claim exemption under section 80E, intended donations to benefit from section 80G, etc. On the other hand, if you use your own vehicle for work, then you can get your salary restructured and make way for claiming fuel expenses, driver’s salary, insurance and maintenance expenses of your car. Similarly, expenditure on books, newspapers and periodicals, fee paid towards any professional courses too is tax free and can be reimbursed. Your telephone bills, mobile bills and internet expenses can also be reimbursed to reduce TDS. Food coupons like Sodexo is another way employees can reduce their TDS and enjoy tax free income.