Income Tax Exemption from Salary?



my salary is 40000 p.m My company is deducting 7000 p.m as Tax please suggest me how can I reduce the tax amount(Get Exemption from IT)

Income Tax Exemption from Salary?
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6 Replies to “Income Tax Exemption from Salary?”

  1. You can increase your exemptions (fill out form W-4) to the maximum allowed without IRS being notified… that maybe 10… but I am not sure. This will reduce what is being deducted but not eliminate it.

    To eliminate your company from deducting withholding tax, became an independent employee… whereas a 1099 will be issued to you at year end, rather than a W-2


  2. Invest Rs 1.2 L under section 80C.

    Purchase health insurance policy.

    Purchase a house availing home loan.

    That will reduce your tax liability.

    HMT


  3. Under Sec. 80-C of the Income Tax, you can save up to Rs.1,20,000/- by investing in specified instruments like Provident Fund, LIC, group insurance, NSC and long term infrastructure bonds etc.

    Further, to reduce tax liability and to get covered medically, you can take medical insurance and any premium paid is deductible from your total income. – Medicaim – up to Rs.10,000/- per year. Not only on your life, you can take mediclaim policy on your dependents also.

    Apartfrom the above, you are eligible to deduct the following amounts from the salary income:-

    (a) Professional taxes deducted by your employer ( 100% eligible for deduction)
    (b) House rent allowance received under Sec. 10(13) – subject to certain condictions.

    All the best.



  4. Invest in PPF,RPF account, purchase life insurance plan ect under sec 80C you will get dedution upto rs1,20,000 from your total gross income.. or purchase medical insurance for parent which is also eligible for deduction..


  5. 1) If you are paying rent , give copy of rent receipt to your office. You might get some deduction.

    2) If you have an educational loan , interest repaid can be deducted from your taxable income.

    3) Invest under Section 80C upto Rs 1.2 lakhs and get deduction . You can deduct up to 1 lakh by investing in the following avenues.

    Your PF ( deduction ) + PPF ( invest in SBI branch ) + Insurance ( life) premium + ELSS ( mutual funds )
    Avoid NSC. For Insurance – go for PURE TERM COVER. Housing loan principal repaid up to Rs 1 lakh .Bank deposit for 5 years , specially for tax saving. ( interest is taxable)

    From this year an extra deduction of Rs 20,000 in Infrastructure Bonds.

    Mediclaim policy for self & family premium paid is deductible up to Rs 15000 in a year under Section 80D

    If you are paying premium for your dependent parents – extra deduction of Rs 15000 or Rs 20,000 ( if 1 of them is a senior citizen)

    Housing loan interest repaid for self occupied house/ flat – deduction up to Rs 1.5 lakhs.

    Over and above this you will have to pay tax .





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