Learning article
Tax Planning for Salaried Employees — Step‑by‑Step
A structured approach to tax planning for salaried individuals — from choosing the regime to making the most of allowances and deductions.
Quick takeaways
Start tax planning in April, not January.
Use the right mix of 80C, NPS, health insurance, and home loan benefits.
Salary structure (HRA, LTA, meal coupons) can legally reduce tax if documented properly.
Story intro
Nisha and Sameer both earned ₹15 lakh per annum, but their tax outgo differed by nearly ₹60,000. The reason? Nisha had optimised her salary structure, claimed HRA and LTA, and invested early in 80C instruments. Sameer scrambled in March and lost out.
Overview
Start early — April planning
Estimate your annual income and possible deductions at the beginning of the financial year.
Declare investment plans to your employer to avoid excess TDS.
Build a monthly plan instead of a last‑minute rush.
Important facts
Optimising salary structure
HRA: if living on rent, ensure you claim the right exemption; keep rent receipts.
LTA: claim for travel (within India) twice in a block of four years; keep tickets.
Meal coupons: up to ₹2,200 per month tax‑free if provided as Sodexo or similar.
NPS employer contribution: up to 10% of basic (14% for govt) tax‑free under 80CCD(2).
Key concepts
Building your deduction stack
Layer 1: 80C (PPF, EPF, ELSS, home loan principal) — fill ₹1.5 lakh if possible.
Layer 2: 80D (health insurance) — up to ₹75,000‑1,00,000 depending on parents’ age.
Layer 3: NPS 80CCD(1B) — extra ₹50,000.
Layer 4: home loan interest under Section 24 + 80EEA if applicable.
Layer 5: education loan interest (80E) if you have an ongoing education loan.
Key takeaways
Regime comparison every year
Re‑evaluate regime choice every year — your deduction claims may change.
If most deductions are unavailable or you don’t plan to claim, new regime might be simpler and cheaper.
Use the regime comparison tool for a quick number check.
FAQs
Common questions
Keep reading
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