1. HOW TO INCREASE TAKE HOME SALARY –
CASE OF FIXING THE SALARY PACKAGE
WITH SPECIFIC REFERENCE TO
PERQUISITES
Group No. 1
Rakesh Thakral
S.Kazi
Prasad K
Yogesh
Venkataramana
Asim Khan
2. Tax planning – Salaried Income
Conceptually, tax planning for salaried
assessees can be divided into two broad
categories namely:
Salary Restructuring; and
Investing in Tax saving devices
3. Tips to Optimize your take home salary
Ask your employer to restructure your salary package
and give salary in the form of following important
perquisites
Leave Travel concession
Medical Reimbursement
Company Lease v/s Self Rent
Reimbursement towards car running and Maintenance
Gift Voucher
4. Tips to OPTIMISE your take-home salary
Leave travel concession
There was no maximum claim limit on LTC provisioned by the income tax
law Two trips in a block of 4 years are allowed (current block being 2010-
2013) for exemption. While for all income tax purposes one uses the
financial year ending March 31, for LTC one would use the calendar year
ending December 31.
5. Tips to OPTIMISE your take-home salary
Medical Reimbursement:
Medical expenses reimbursement maximum of Rs 15,000 per annum is
allowed; medical bills are to be produced for the same
6. Tips to OPTIMISE your take-home salary
Company Lease Vs Self Rent
In case of a company lease, the amount of rent paid by your employer is
deducted from your salary and hence your taxable income reduces to that
extent.
However, perquisite value of such accommodation is added to your taxable
income. Perquisite value is the lower of 1) 15% of taxable salary excluding
the value of perquisites; or 2) Actual rent paid by the company.
For a self lease, on the other hand, you can claim HRA exemption. The tax
exemption on HRA is computed as the minimum of following three
conditions: i) Actual HRA on your pay slip; ii) 40-50% of your basic salary;
iii) The rent amount minus 10% of the salary. If you stay in any of the
metros (Mumbai, Kolkata, New Delhi or Chennai), HRA is calculated at
50% of your salary. In other cities/towns, HRA is calculated at 40% of the
salary.
7. Tips to OPTIMISE your take-home salary
-cont….Company Lease Vs Self Rent:-
You have to calculate the net tax benefit under both the options to find
which gives you a higher tax saving. “If you are saving more through your
HRA claim, then it’s better to opt for a personal accommodation.
On the other hand, despite the addition of perquisite, if the overall taxable
income is lowered because of company accommodation,
8. Tips to OPTIMISE your take-home salary
Driver Salary and Car Maintenance
Reimbursement towards car running and Maintenance and driver salary used
for personal and official purpose –( Car Owned by employee used for office
and personal)
Reduction of Taxable Income Rs. 32400 P.A ( 1800 plus 900 per month)
9. Tips to OPTIMISE your take-home salary
Gift Free voucher
Gift Voucher up to 5000/- is Tax free perquisite
10. One more way to understand prerequisite usage to
increase take home salary
Mr. P.Joshi requested his company to restructure his salary break up. Before restructuring the
basic salary was Rs. 40000 per month i.e. 4.80 Lacs P.A; he has requested that his basic be
reduced and some other components be added to his salary other than the HRA. Below are the
components and their amounts
