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    Tax Exemption

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    SvsSridhar
    The document compares two compensation structures - the original CTC package and a tweaked version. The tweaked package lowers the taxable salary by reducing some allowances and introducing other nontaxable reimbursements like conveyance, medical, mobile, and food. As a result, the tax outgo is reduced to zero in the tweaked package compared to Rs. 12,875 originally. Employees can use this approach of restructuring compensation components to minimize their tax liability.

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    Tax Exemption

    Uploaded by

    SvsSridhar
    2 views2 pages
    The document compares two compensation structures - the original CTC package and a tweaked version. The tweaked package lowers the taxable salary by reducing some allowances and introducing other nontaxable reimbursements like conveyance, medical, mobile, and food. As a result, the tax outgo is reduced to zero in the tweaked package compared to Rs. 12,875 originally. Employees can use this approach of restructuring compensation components to minimize their tax liability.

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    The document compares two compensation structures - the original CTC package and a tweaked version. The tweaked package lowers the taxable salary by reducing some allowances and introducing other nontaxable reimbursements like conveyance, medical, mobile, and food. As a result, the tax outgo is reduced to zero in the tweaked package compared to Rs. 12,875 originally. Employees can use this approach of restructuring compensation components to minimize their tax liability.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    2 views2 pages

    Tax Exemption

    Uploaded by

    SvsSridhar
    The document compares two compensation structures - the original CTC package and a tweaked version. The tweaked package lowers the taxable salary by reducing some allowances and introducing other nontaxable reimbursements like conveyance, medical, mobile, and food. As a result, the tax outgo is reduced to zero in the tweaked package compared to Rs. 12,875 originally. Employees can use this approach of restructuring compensation components to minimize their tax liability.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    CTC CTC Tweaked

    Basic Salary 2,22,000 2,22,000

    HRA 1,80,000 1,50,000

    Special Allowance 80,000 44,200

    LTA 18,000 10,000

    Conveyance allowance 19,200

    Medical reimbursement 15,000

    Mobile reimbursement 14,400

    Food coupons 13,200

    Residential phone bills 12,000

    CTC 5,00,000 5,00,000

    Taxable Salary CTC CTC Tweaked

    Basic Salary 2,22,000 2,22,000

    HRA 1,80,000 69,000

    Special Allowance 80,000 44,200

    LTA 18,000 10,000

    Total taxable salary 5,00,000 3,45,200


    Tax outgo CTC CTC Tweaked

    Tax outgo 12,500 –

    (FY 2017-18)

    Cess 3% 375 –

    Total Tax 12,875 –

    As you can see earlier tax payable was Rs 12,875. It has been brought down to 0
    after restructuring.
    You can use any of the components mentioned in the table above to restructure your
    CTC and reduce the tax paid by you. You must also try to claim 80C deduction so that
    your tax outgo is minimum. Your contribution to EPF is eligible for deduction under
    section 80C.

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