Topic: I am a salaried employee and want to save my earnings without getting taxed

Please explain

This message was edited 2 times. Last update was at 21/07/2009 07:43:51

There are various avenues available for salaried person to save tax:

First and foremost decide in which tax slab you fall, accordingly check following:
• Have you fully optimized deductions Under Section 80C and 80D for Medical Insurance
• Check for other deductions as well like 80G for donations.
• Is there and home loan going on, If yes interest payment can be claimed as deduction.

Further if your employer offers Fringe benefits liable to fringe benefit tax (FBT) the same shall not be taxable in your hand accordingly your taxable income shall reduce considerably. Some of the fringe benefits are as follows:

(i) Telephone bills reimbursement.
(ii) Conveyance reimbursement.
(iii) Free or concessional ticket for private journeys of his employees or their family.
(iv) Reimbursement of entertainment bills
(v) Gifts.
(vi) Use of health club and similar facilities.
(vii) Tour and travel (including foreign travel).

The above fringe benefits provided by the employer to the employees shall not be taxable in the hands of the employees. However, the employer shall have to pay fringe benefit tax on the value of the above fringe benefits. At times employers recover FBT from employees as a part of Cost to Company (CTC), still it is beneficial for employees to bear FBT which varies from 1.7% to 17% as compared to Income tax slabs can go upto 33.99%.

There are other avenues as well like Car lease in favour of any member of employee’s family who has nil or low income in this way a portion of employee’s income gets transferred to his family member who does not fall in taxable slab.

Click here to download free income tax calculator in India

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