Salary Breakup

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  1. Devender Thakur

    Devender Thakur New Member

    If the salary of an employee is Rs.17000/- pm , plus 3 leaves allowed @ 17000/30*3 plus sunday pay (sun open) @ 17000/30*4 , then how to break the sa;ary in order to minimize the tax burden? Plz guide me
     
  2. Neha Sharma

    Neha Sharma Active Member

    If an employee's salary is Rs. 17000, his annual salary would be 204000. If I take into account leaves and the fact that office is open on Sundays - there would only be a marginal increase and not much.

    There is no tax upto Rs. 2,00,000. Tax on the balance income wont also be applicable because he can claim benefit of Section 87A and claim rebate. Refer: http://www.charteredclub.com/section-87a-rebate/

    To summarize, as the total tax payable is Nil in such a case, there is no benefit of dividing the salary under different parts to minimize tax burden
     
  3. Devender Thakur

    Devender Thakur New Member

    But if the salary is paid for Leaves and Sundays extra then It comes to be Aprx Rs.20970/- pm and Rs.251000/- Per Annum, so it will fall under tax net. Then it will be attract provision for TDS. In that case salary breakup will be needed
     
  4. Neha Sharma

    Neha Sharma Active Member

    In such a case, you can show some allowances which are exempted from tax up to a certain extent.

    Moreover, the taxpayer can show investments under Section 80C and no TDS would be liable to be deducted if his taxable income after taking into account allowances and 80C is below 2.2L
     
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