Sudhir Kaushik of Taxspanner.com
Pune-based car engineer Vijay Sharma has a really tax-friendly wage construction. He has additionally utilised many of the deductions obtainable to him. Due to this fact, there’s little or no scope to cut back tax additional. Even so, Taxspanner says Sharma can save about Rs 11,400 if some taxable allowances in his pay are changed with tax-free perks.
The medical and transport allowances in Sharma’s pay are actually taxable. If these are changed by reimbursements for phone bills (Rs 1,000 monthly) and meals coupons (Rs 1,833 monthly), he stands to avoid wasting Rs 7,000 in tax. Reimbursement of newspaper payments value Rs 750 a month will save one other Rs 1,900. These perks are tax free towards submission of payments and precise utilization.
Revenue from employer
Revenue from different sources
Subsequent, Sharma ought to rejig his investments in fastened revenue choices. He has fastened deposits of just about Rs 1.5 lakh, which earn him roughly Rs 12,000 a 12 months. Sharma ought to contemplate shifting his cash to debt mutual funds. Curiosity from fastened deposits is absolutely taxable as revenue yearly whereas the positive aspects from debt funds are taxed solely on the time of redemption. What’s extra, if the holding interval exceeds three years, the tax is barely 20% after indexation profit.
Sharma is the only real breadwinner within the household. He also needs to take an insurance coverage cowl of Rs 1 crore. Sharma’s firm provides him the NPS profit and he additionally invests within the scheme on his personal. At 35, he ought to go for an aggressive allocation which places 75% of the corpus in fairness funds.
Vijay Sharma’s tax
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