What deductions can a salaried employee claim?
Table of Contents
What deductions can a salaried employee claim?
Allowable Deductions
- Life insurance premium.
- Equity Linked Savings Scheme (ELSS)
- Employee Provident Fund (EPF)
- Annuity/ Pension Schemes.
- Principal payment on home loans.
- Tuition fees for children.
- Contribution to PPF Account.
- Sukanya Samriddhi Account.
What is income tax deduction in salary slip?
It is the amount deducted by the employer on behalf of the income tax department. It is based on the gross tax slab of the employee. One can reduce this amount by investing in tax-exempt investments like equity funds (ELSS), PPF, NPS, and tax-saving FDs. It appears on the deductions side of the salary slip.
What are the deductions in monthly salary?
How do I calculate TDS on my salary?
| Income Tax Slabs | TDS Deductions | Tax Payable |
|---|---|---|
| Up to Rs.2.5 lakhs | Nil | Nil |
| Rs.2.5 lakhs to Rs.5 lakhs | 10\% of(Rs.5,00,00-Rs.2,50,00 | Rs.25,000 |
| Rs.5 lakhs to Rs.6.33 lakhs | 20\% of(Rs.6,33,00-Rs.5,00,00) | Rs.26,600 |
How much is the tax for salaried employee?
How to Calculate Taxable Income on Salary?
| Net Income | Income Tax Rate |
|---|---|
| Up to Rs.2.5 lakhs | Nil |
| Rs.2.5 lakhs to Rs.5 lakhs | 5\% of (Total income – Rs.2.5 lakhs) |
| Rs.5 lakhs to Rs.10 lakhs | Rs.25,000 + 20\% of (Total income – Rs.5 lakhs) |
| Above Rs.10 lakhs | Rs.1,12,500 + 30\% of (Total income – Rs.10 lakhs) |
How can I reduce my tax deductions?
- Use up your Rs 1.5 lakh limit under Section 80C.
- 2) Contribute to the National Pension System.
- 3) Pay Health Insurance Premiums.
- 4) Get a deduction on your rent.
- 5) Get a deduction on the interest on your home loan.
- 6) Keep some money in your savings account.
- 7) Contribute to charity.
Do companies show other deductions on payslips?
Due to the space constraint & common payslip format, most of the company show this in other deduction. What are other deductions in a salary slip?
What is standard deduction on salary?
Standard deduction on Salary is a fixed benefit amount that is deducted from the gross salary, to calculate the Taxable Income. This is irrespective of the expenses done or Investments made by an Individual.
What is professional tax and how to deduct it?
Professional tax paid by the employee, by way of deduction from his salary, is allowed as deduction from the taxable salary income. The professional tax paid during the year, even if paid in advance, is deductible from the salary income.
What is tax deduction amount of Rs 50000?
It is a fixed amount of Rs 50000 (as increased in Finance act 2019), which is deducted from your salary to calculate the taxable income. This is over and above your Claimable savings u/s 80C, 80D, 80CCD, and others.