Should Salary be split into HRA, Medical etc for Tax Benefit?

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  1. Saai Sekar

    Saai Sekar New Member

    Dear Sir,
    A friend was employed in a private company and his total gross salary for the period 1-4-2014 to 31-3-2015,is Rs 2,70,000.(no deductions like PF etc).
    He has made investments in stock market,and made a short term profit of Rs 55,000/-. In 80 C, he has Rs 63,000.
    A tax consultant,suggested him the salary,can split in to Salary,HRA andConveyance & medical.
    Pl suggest whether,the income can be split and tax avoided. Please guide.
  2. Karan Batra

    Karan Batra Well-Known Member

    Yes, it the advice given by the tax consultant will help your friend reduce his tax outgo.

    However, the employee cannot himself decide this break-up of salary. The employer should decide this break-up and give him in writing.
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