Income Tax News: When it comes to filing Income Tax Returns, strategizing to save tax becomes a priority for every individual. It’s crucial to understand that effective tax planning requires foresight and a proactive approach. By incorporating specific allowances into your salary, you can potentially save a substantial amount without the need for additional investments. Here are seven allowances that, when included in your salary, can contribute significantly to tax savings.
Transport or Conveyance Allowance
Transport Allowance, Traveling Allowance, or Conveyance Allowance covers commuting expenses between your home and office. While many companies include this allowance in their employees’ salaries, some may not. If it’s not part of your salary, consider getting it included to avoid taxation on this amount.
Meal and Entertainment Allowance
Food coupons, meal vouchers, or Sodexo coupons, sometimes referred to as entertainment allowance, can also lead to tax savings. Check your company’s policy regarding this allowance, as not all companies provide it. For those that do, submitting a monthly food bill of a specified amount can result in tax-free reimbursement.
Vehicle Expenses Allowance
Certain companies offer car maintenance allowances covering expenses like fuel, maintenance, and even driver’s salary. If you have substantial car-related costs, discuss the possibility of including this allowance with your company’s HR. Having a car maintenance allowance can help you save on taxes.
Communication Allowance
Reimbursement for mobile phone and internet bills is another allowance that can reduce your taxable income. Companies often provide this allowance up to a certain limit, helping you save on taxes while covering your communication expenses.
Uniform Maintenance Allowance
While relatively uncommon, some companies provide a uniform allowance to cover the cost of maintaining work-related uniforms. If your company offers this allowance, include it in your salary to enjoy tax-free benefits on this amount.
Medical Allowance
Certain companies include a medical allowance that allows employees to reimburse their medical expenses or those of their families. If this allowance is not part of your salary, consider getting it included to benefit from tax savings while ensuring your family’s health.
Reading Material Allowance
For jobs that require reading materials such as newspapers, magazines, or books, some companies provide an allowance for these expenses. If you work in such an industry, including this allowance in your salary can contribute to tax savings.
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