How to save tax
by Tushar Shinde on Aug 11, 2007 09:42 PM Permalink | Hide replies

      Income of Tushar G. Shinde

      Mon thly      Yearly

Basic Salary       12,500.00        150,000.00

HRA       6,250.00        75,000.00

Transport allowance        800.00        9,600.00

Medical Reimbursement       1,250.00        15,000.00

Employers Provident fund       1,500.00        18,000.00

Sodexho       -        -

Special Allowance       2,700.00        32,400.00

       &nb sp;
Gross CTC      25000      300000
       ;
Deductions
Total Provident fund      3000      36000

Profession Tax      200      2500
      &nb sp;
Meal      30      360
&nb sp;
Total Deductions      3230      38860

Net take Home (Pre Tax)      21770      261140

1.       My question is how to reduce the tax to minimum, Please show me the calculation
2.      I have recently joined the company as on 25 the June 2007. HR department took our tax declaration in which I have not shown HRA but I am definitely claiming that in this financial year at around Rs.90,000/- I am staying in my fathers flat but would they cut my TDS to that extent per month.

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RE:How to save tax
by Amitabh on Aug 12, 2007 12:36 PM Permalink
If you are staying in your father's flat,plz show a rent receipt to get exemption in HRA.You can get your entire HRA exempt but for that you will have to show a rent receipt of Rs 7500 per month.This will ensure that rent paid less 10 % of your salary (taken as Rs 12,500 pm here) is equal to your HRA.Also I assume that you are living in a metro,otherwise the max exemption available on HRA will be 40 % of your salary,that is Rs 5000 pm only.Besides,plz ensure that you invest such that you can claim deduction of rs 1 lac under sec 80C.This of course,will include your own PF contribution.You may invest in ELSS,PPF,NSC,repayment of home loan principal,etc.

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