Dear Pankaj.. My CTC is 5 lacs/annum (HRA+Medical Expense+Rs 13,200/annum as meal coupons= 5 lacs). I have an education loan (Higher Education)of 4 lacs @ interest rate of 13-14% per annum. My actual home rent per month is Rs 9500 and I am living in Hyderabad. Please suggest me an optimum salary structure so that I can have the least tax liability. I am planning to invest around Rs.3000-5000/month on ELSS (through SIP) out of my savings for the sake of saving tax. Please suggest whether I should go for ELSS or for PPF or NPS?? Thanks a lot...
2 Answers
Hi
whatever the interest paying for the loan is deducted from your taxable salary.Intially deduct the 2 lakhs as it is non taxable(Basic exemption). After deducting the HRA and other deductibles offered by your company (petrol expenses, phone,medical expenses ) you can deduct the interest amount you are goi to pay for this year. The remaining amount is taxable at 10 percent.
For calculating the HRA exemption (eventhough we pay more than we may not be eligible for entire amount deduction)
Pls refer the post for HRA calculation
http://www.indianexpress.com/news/how-much-of-your-hra-is-tax-exempt/588006/0.. Pls do this and post back the amount which is taxable. we will help you to plan
pls mention ur age and risk apettite
Max HRA deduction you may have on basis of rent paid of Rs 9500 would be Rs 7600 per month only. If your basic salary is Rs 19000 and HRA component is Rs 9500, you would have maximum HRA benefit.
Income tax exemption for HRA will be least of following:
- The actual amount of HRA received as a part of salary.
- 40% (if living in non-metro area) or 50% (if living in metro area) of (basic salary+Dearness allowance (DA)).
- Rent paid minus 10% of (basic salary+DA).
For maximum tax benefit, you have following salary structure monthly components: Basic: 19000, HRA: 9500, Special allowance: 10816, Medical reimbursement: 1250, Food coupons: 1100
on this package, total income tax for FY 12-13 would be around Rs 18000+education cess, without considering any 80C/80D/80E deductions.
If your education loan interest is say Rs 50,000 in this year, your income tax would be further reduced by Rs 5000 for section 80E deduction.
On further deduction of Rs 60000 deduction for section 80C (ELSS), income tax would reduce by another 6000 Rs.
You can invest full 1 lakh under 80C deduction. Apart from 60000 in ELSS, you can invest 20,000 each in PPF and NPS for long term.
Apart from these if your employer agrees, you may reduce special allowance and consider adding more non taxable components like Transport allowance (Rs 800 per month), LTA, telephone/internet reimbursements, car expenses reimbursements and driver salary expenses.
Related