New Delhi: If you are an employed professional and pay income tax, you can save some of it through effective investments. If you do not have convention charge, food coupon or a special allowance as a part of your salary, it is recommended to get these included. At the same time, investment in schemes like NPS will also help in saving.
You can also ask your company to include some allowances in your salary package to save tax. Reimbursements for expenses like telephone bills, newspaper bills and purchase of work-related gadgets can also help save tax. In addition, investment in NPS provides tax exemption under Section 80CCD(2). These decisions can give you tax exemptions upto Rs. 60,000.
Home rent
If you live in a rented house and HRA is not a component of your salary, you will not be able to claim this for tax exemption. The HRA component of an employee's salary is the company's way of reimbursing the employee's rent. But if you get your company to give you HRA , you can claim a tax return of up to Rs. 5,000 per annum under Section 80GG. This will reduce your tax liability by Rs 12,500.
Discount on Insurance premium
You also also get tax exemption on buying a health insurance plan. If the premium of the policy is Rs. 25,000, you can get tax exemption of up to Rs. 1,500. If your premium is less than that, you can increase it to Rs. 25,000 so that you can get more benefit from tax exemption.
Investing in NPS
If you get more money as a special allowance, you can ask your company to get it reduced. You can instead get a telephone allowance of Rs. 12,000 and a newspaper of Rs. 12,000 from your company. Depositing their spending bills will cover tax-free expenses. In addition, you can deposit 10% of your basic salary in the National Pension Scheme (NPS). Investment in NPS is also exempted from tax.