It’s March again—the time for the salaried class to submit tax proofs to employers for claiming tax deductions for the year. Surprisingly, most salaried taxpayers seldom look beyond the popular tax savings on offer like investments under Section 80C, home loans, and a few other oft-used options. Apart from Section 80C, there are other lesser known tax deductions that you can use to lower your tax obligations.
Uniform allowance: If your work requires you to wear a dedicated uniform to office, you may get an additional tax deduction. Many employees in the corporate world have fixed attire at work. If your company requires you to wear any type of uniform, it is bound to offer you an attire allowance as part of your salary structure. All the purchases you make against this are tax-free, provided you duly submit the bills to your employer for each financial year.
Make use of health club allowance: Many companies today offer a health club allowance to their employees. If your company is also offering the same, you can claim tax exemption on this amount. So, read your offer letter or pay slip and tick the claim against this allowance, when you submit your tax proof.
Your telephone bills are tax-free: If your company is reimbursing your telephone or internet bills, you can use the reimbursements for saving tax. However, to claim this deduction, this reimbursement has to be included as cost to company, in your offer letter. The overall bill reimbursement offered by companies will, however, depend on the nature of your work.
Meal and gift vouchers: If your company is offering meal vouchers, or gift vouchers are being offered to you as part of incentives, and this is considered as cost to company, you can use these to get tax exemption. The food vouchers you receive for your office meals are tax-free up to R2,400 per month.
Tax deductions for professional pursuits: If you are pursuing any academic training or studies during your career, and if your company is offering part of your salary in the form of professional pursuit allowance, it offers a dual benefit to you as an employee. It not only helps you to stay attuned with your skills, but you can also claim tax deductions against this allowance.
NPS contribution: With the Union Budget 2016-17, NPS is sure to become a popular investment option for employees. Contributions made by your company towards NPS are exempted from income tax for up to 10% of your basic salary plus DA under Section 80CCE. So, the higher your basic salary, the more tax benefit you can avail from employer contribution to NPS as well, which is over and above your contribution.
Car lease and reimbursement expenses: If company-owned cars are leased to you, you can use the allowance to save tax. Right from the expenses incurred for the provision of a company-leased car to reimbursement of the day-to-day running expenses of the car, including fuel charges and driver’s salary—all qualify for tax deduction for an employee. So, opting for your own car should not be a priority if your company is offering you to choose between the self-owned and the company-leased car.
Most of these allowances come under Section 10 14(i). You can save a significant amount of tax if you utilise the tax deductions on offer to the maximum, including the lesser-known ones.
The writer is CEO, BankBazaar.com