HOW GADGET & MEAL ALLOWANCE REDUCES YOUR TAX LIABILITY FROM SALARY ?

• HOW GADGET & MEAL ALLOWANCE REDUCES YOUR TAX LIABILITY FROM SALARY ?

An employee can save Income-Tax up to Rs. 48,000 in tax if his salary structure includes gadget allowance as well.
A gadget allowance can help an employee to save 90% tax on the amount he pay for his gadget purchases.
For example ,If you’re in the 30% tax slab, you’d normally pay ~₹30,000 or more in taxes on that ₹1 lakh.
But if your employer pay it under gadget allowance, it’s taxed at just 10%.
10% of Rs 1 lakh = ₹10,000 → tax @ 30% Rs 3,000.
You just saved  Rs 27,000
Yes that’s what is a laptop reimbursement, it doesn’t make your laptop free but helps you save on taxes.
Under Section 17(2) Income-Tax Act, gadgets and appliances bought in the name of the company and given to the employee for personal use are taxed at 10% of their value.

GENEROUS AND EMPLOYEE BENEFIT CENTRIC COMPANIES, NOT JUST GIVE GADGET ALLOWANCE BUT ALSO DIFFERENT TYPES OF ALLOWANCES TO SAVE TAXES ON:

1.   Your every day food and grocery purchases: Meal Allowance ( exempt up to 26,400 p.a )
2.   The courses you take to upskill yourself: Professional pursuit allowance ( fully tax-exempt, no limit )
3.   The newspaper subscriptions you buy both physical and online: Books & Periodicals ( fully tax-exempt, no limit )
4.   Internet and telephone bills you pay for your WiFi at home ( fully tax-exempt, no limit )
5.   An employee who opted for the NPS benefit from his employer. Can save tax. Under Section 80CCD(2), 10% of her basic pay put in the pension scheme is tax-free.
To be Remain in the Old Tax Regime

6.   If an employee has chosen to stay in the old tax regime because he claims exemption for house rent allowance, invests in tax-saving options under Section 80C and has bought medical insurance covers for his family and her parents. He also invests Rs.50,000 in the NPS to claim deduction under Section 80CCD(1b). These deductions would not be available to him under the new tax regime and his tax would be significantly higher by almost Rs.1.22 lakh.
Courtesy : Economic Times
R V Seckar , FCS ,LLB
rvsekar2007@gmail.com