Taxes have always been a sore point for salaried individuals. If you’re feeling the taxman’s pinch on your salary, it’s time to find ways to maximise your earnings by reducing your taxable salary.
You must already be aware of Section 80C that offers a deduction of Rs 1.5 lakh on your income. But did you know there are several other allowances and tax-saving options that can reduce your tax outgo? Here are five lesser-known employee tax-saving options you can save thousands in taxes:
Use your own car for official travel? Change the arrangement from using your own car to a company-provided vehicle with a driver and this will go a long way in cutting your tax bill. This allowance lets you save tax on expenses incurred against fuel, car maintenance and driver’s salary too. Such an arrangement needs to be approved by your company and added to your bouquet of employee tax benefits. Make sure to maintain all your bills and you can save as much as Rs 11,000 in a year with this motor car and fuel allowance.
Reading is key when it comes to staying updated with the latest happenings related to your profession, such as IT, Artificial Intelligence, finance, marketing, medical science and so on. That’s why the government offers books and periodicals allowance to all employees. Under this benefit, you can purchase newspapers, books, periodicals, journals, and submit actual bills for reimbursement. It is fully exempt from income tax on actual bills submitted.
You can donate to charitable organisations and get up to 100% tax exemption on the amount under Section 80G. Donating to government funds like PM's Relief Fund, Flood and Earthquake Relief Fund have 100% deduction eligibility.
Planning to join an academic research programme outside of work? That’s a win-win for you as it entails your professional growth and helps you claim research allowance. This allowance is granted to employees for the purpose of encouraging academic research, training and other professional pursuits. The expenses incurred at educational or research institutes is covered by your employer under this allowance and are tax-exempt.
Some employees are eligible to appoint a helper or assistant for the performance of their official duties. If you’re one of them, you can claim this allowance and save tax on the expenses incurred against the salary of a helper or assistant. Interesting, right?
Who said Good Samaritans don’t care about tax savings? You can donate to charitable organisations and get up to 100% tax exemption on the amount under Section 80G. Donating to government funds like PM's Relief Fund, CM's Relief Fund, Earthquake Relief Fund and Flood Relief Fund have 100% deduction eligibility. Donating to NGOs qualifies you for a 50% deduction of the donated amount. So, if you donate Rs 10,000 to an NGO, you can claim a deduction of Rs 5,000 from your taxable income (50% of the donation amount) in one shot. This deduction applies to all donations subject to certain limits.
We often incur expenses from our own pockets and we’re not even aware that we’re eligible for big tax savings on the same. It’s pertinent to be aware of such tax-saving options and look beyond Section 80C deductions and explore offerings under Section 80G, Section 80D and more. Also, you need to be smart about maintaining all your bills and claiming reimbursements on time.
Zeta is a digital tax benefits solution that is doing its bit in making reimbursements less tedious for employees and employers alike. Want to know more about employee tax benefits? Write to us at email@example.com.