Salaried class have always complained of raw deal year after year in income tax laws. But the good news is you can still manage to pay Zero (NIL) income tax on salary of up to Rs 20 lakhs (Salary here means cost to company). All you need to have is right salary structure and invest in RIGHT Tax saving plans! We give you details below.
Best Salary Structure for Saving Tax
Salary structure is very important to keep taxes low. The good news is most employers are partially flexible with salary structure. We give you one such sample salary structure for CTC (Cost to Company) of Rs 20 lakhs.
We have kept following points in mind:
- Included all components which are tax free
- For most benefit of HRA – it should be 50% of Basic salary (40% is good if rented houses are in non-metro)
- Car Maintenance – The company can reimburse Rs 1,800 per month for car less than 1600 CC (Rs 2,400 per month for bigger cars) along with Rs 900 per month for driver salary as tax free allowance.
- Employer…
