How to pay zero tax and get tax free income for over Rs 10 Lakhs? | My... http://myinvestmentideas.com/2015/03/how-to-pay-zero-tax-and-get-tax-...

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March 16, 2015 Suresh KP

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How to pay zero tax and get
tax free income for over Rs
10 Lakhs?
Last week I wrote article about
how one can save income tax
upto Rs 4.44 Lakhs of his
income and there was very
good response from readers. I
fall under 30% tax bracket. I was wondering whether I can save income
tax of over Rs 10 Lakhs income. I was analyzing various avenues to save
income tax and felt there was scope to save income tax for over Rs 10
Lakhs income. What are the various ways where we can get tax free
income of over Rs 10 Lakhs ? How to pay zero tax for over Rs 10 Lakhs
income? I found some answers and some may be useful for you. Read on.
Suresh KP i.e. me, have
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on this website. I love
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How to pay zero tax and get tax free income for over Rs 10 Lakhs?

Well, whatever I am indicating is a legal way to get tax free income for
How to pay zero tax
income over Rs 10 Lakhs income. You may or may not implement all these
and get tax free income
options as there are some dependencies on your employer too, but you
for over Rs 10 Lakhs?
can try and get maximum tax exemptions and earn tax free income and 66 good small business
pay almost zero tax upto Rs 10 Lakhs income. ideas with low
investment
Also Read: What are the various tax saving investment options
Top 10 Best
available in India?
Performing SIP Mutual
# 0 Your basic income tax exemption Rs 250,000 Funds to invest in 2016
Precision Camshafts
I would not discuss much about this as it is basic exemption. IPO Should you
invest?
# 1 Claim 80C Exemption for Rs 150,000 Top 10 Best Mutual
Funds to invest in
Following are the eligible deductions u/s 80C. India in 2015

Children tuition fees. No transport allowance / term fees is

allowed as deduction.
Amount deposited in Public Provident Fund. You can open PPF
account with any post office / SBI / ICICI Bank etc.,
Classroom Lessons
Amount contributed towards the Employees Provident Fund (EPF) (57)
Post office term deposit for 5 years / Bank FD scheme of 5 years. Fixed Income (157)
National Saving Certifications (NSC) 5 years and 10 years Insurance Plans (81)
ELSS tax saving Mutual Funds. Millionare/Crorepathi
Senior Citizen Savings Scheme from post office / bank Ideas (8)
Principal repayment of Home Loan amount Money Saving Ideas
National Pension System / New Pension Scheme (NPS) (26)
Life Insurance Premium
Mutual Funds (60)
Other-Ideas (158)
Amount deposited in Sukanya Samriddhi Account
Retirement Planning
(25)
2) Claim additional deductions under 80CCD towards NPS Rs 50,000
Small Business Ideas
(8)
Employees can contribute to New Pension Scheme / National Pension
Stocks (224)
Scheme (NPS) up to 10% of their salary. In such case, an employee is Taxation (72)
eligible to claim additional Rs 50,000 tax benefits over and above 80C.
Hence max limit 80C + 80D would be Rs 2 Lakhs.

Also Read: How your parents would be able to save income tax for you?

3) Employer contribution of NPS Rs 100,000 Suresh KP on Top 10

Best Performing SIP
Many employers are willing to help employees by contributing to schemes Mutual Funds to invest
like NPS where employees would get tax exemption. Have you checked in 2016

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with your employer whether they can contribute to NPS and deduct from Suresh KP on How to
your total CTC (Cost to the company)? They can contribute up to 10% of pay zero tax and get tax
your salary. This is a good way to claim tax exemption and get the highest free income for over Rs
interest rate with this safe investment scheme. 10 Lakhs?
Kongkon K. Bora on
4) Claim interest on house property loan upto Rs 200,000 How to pay zero tax
and get tax free income
If you have taken house loan, you are eligible to claim interest on home for over Rs 10 Lakhs?
loan (which is termed as loss from house property) up to Rs 2 Lakhs. This
is only interest from housing loan. You can fulfill your dream as well as
get income tax exemption.

5) Exemption of Transport Allowance for Rs 19,200 per annum

From next financial year 2015-16, the transport allowance exemption has
been increased to Rs 1,600 per month / Rs 19,200 per annum. You need
not produce any proofs for this, but just claim as an exemption.

6) Exemption for Health insurance premium up to Rs 25,000

You can subscribe to a good health insurance plan and claim health
insurance premium exemption up to Rs 25,000 per annum. This would
satisfy your basic need of having a health insurance plan and also ensures
that you claim relevant tax benefits.

7) Medical allowance Rs 15,000

You can submit medical bills to your employer and claim upto Rs 15,000
as medical allowance as part of your total compensation (CTC). In case
your employer does not allow for this deduction, you can claim this
amount as exemption while filing income tax returns and claim as
exemption.

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8) Medical insurance premium for parents Rs 30,000

You can claim the medical insurance premium for your parents as
exemption upto Rs 30,000. Due to increase of the cost of medical
expenses, one has to mandatorily buy a good health insurance for their
parents. There is no choice, but you can claim this as an exemption from
your total taxable income.

9) Leave Travel Allowance Rs 25,000

Many of us tend to ignore this LTA (Leave Travel Allowance) which one
can spend and claim exemption up to Rs 25,000. While there is a guideline
that you can claim LTA twice in a period of 4 years, you can claim upto Rs
50,000 as one time in a 2 year period, hence an allocation of Rs 25,000
per annum is done here. Note that this amount would depend on the
employer and may change from employer to employer.

You may also like: How working couples can save income tax in smart
way?

Tax Free Allowances / perquisites

Below are some of the tax free allowances / perquisites which employers
are providing these days. They would depend on an employer to
employer. You can claim to maximum extend to enjoy tax benefits.

10) Fuel expenses reimbursement upto Rs 100,000

Many employers provide fuel expense reimbursement for their employees

depending on their grade. While at junior level, it may be at Rs 30,000,
for employees who are earning above Rs 10 Lakhs per annum, employers
are providing Rs 1 Lakh fuel expenses at a minimum. I have not considered
any car schemes here, and this is simply fuel expense reimbursement
which could be based on actual.

11) Phone / Mobile expenses reimbursement Rs 30,000

Many employers provide reimbursement of phone and mobile bills to the

tune of Rs 30,00 per annum as part of the CTC structure. I heard in some
companies, it is over Rs 50,000 per annum. I have considered Rs 30,000 on
the conservative side.

12) Newspaper / Magazine reimbursements Rs 14,000

Many employers are giving reimbursements of newspaper / magazine to

the extent of Rs 14,000 per annum for senior employees earning over Rs

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10 Lakhs per annum. Some companies are restricting only to magazine

cost reimbursement. One can claim this as part of their CTC. I have taken
this average after inquiring with some of my friends who are working in
MNC and large companies.

Also Read: Top and Best Tax Saving ELSS Mutual funds to invest in 2016

13) Meal Coupons / Sodexo coupons Rs 12,000

Many MNC companies are providing Sodexo coupons as part of their CTC
structure. If you are not encashing such perquisites provided by your
employers, you are missing something and paying unnecessary taxes. I
have taken this amount on the low side as some are providing this as just
Rs 1,000 per month, but some MNC companies are providing Rs 3,000 per
month.

Also Read: A to Z of Income tax Provisions in India to save income tax

Conclusion: I am not saying that these are provided by all employers. But
to the maximum extent, many Multi National Companies / IT companies /
Large companies are providing them. One should encash them and see
how they can pay zero tax and get tax free income for over Rs 10 Lakhs
income.

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Readers, I would love you hear from you about paying zero tax for over
Rs 10 Lakhs income. Are you trying these options. Does your employer
provide these facilities to you? If yes, comment with some more
details.

If you like this article, please share this on your Facebook or Twitter. This
would be a special gift which you would be giving to our blog.

Suresh
How to pay zero tax and get tax free income for over Rs 10 Lakhs?

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Older Comments

Kongkon K. Bora
January 26, 2016 at 12:12 pm

Your article is related to salaried persons only. Can u inform how

to pay zero tax and get tax free income for over Rs 10 lakhs by a
self employed person.

Reply

Suresh KP
January 26, 2016 at 2:43 pm

Kongbon, you can take relevant tax saving options from

this pertaining to you. There are no specific additional
deductions available for self employed person.

Reply

rk
January 26, 2016 at 6:19 am

Dear sir.
Thanks for all above
Pls solve my query
I am a govt employee..
10% is deducted for NPS from my salary every month as
mandatory..
Where can I include this amount
In 80ccd or 80ccd2
Coz if I include it in 80ccd I can save 50ooo ans in 80ccd it will
be 1lk

What if 80ccd is total 20000 can I divide it as 150000+50000 as

80c and 80ccd as NPS IS INCLUDED IN BOTH.

Do I need to deposit tickets for LTA

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Do I need to deposit bills for medical claim like my wife is

pregnant .can I show medical checkups bills..or cal claim the
rebate without bills
Thanks

Reply

Nilesh
January 26, 2016 at 4:58 am

Its a wonderful information shared by youmany thanks to you

I wasnt aware of the exemption on fuel expenses19,500/- can
you please guide on how to apply for it because.it comes as a a
part of ctc

Reply

Suresh KP
January 26, 2016 at 5:56 am

Nilesh, These are offered as part of CTC from your

employer. Pls check and claim the amount

Reply

Older Comments

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