Salaried Employees – How To Optimise Your Taxes

Ways to Optimise Your Taxes

Understanding the tax laws and taking advantage of Pluxee tax savings opportunities can help reduce your tax liability. By investing in Pluxee tax benefit such as tax-saving instruments, claiming deductions, submitting investment proofs on time, planning your salary structure, and filing your taxes on time, you can optimise your taxes and enjoy tax savings. Pluxee Meal Benefit is an excellent opportunity of tax savings for employees that salaried people should take advantage of. Read further to know how employees can benefit from strategic tax planning and utilising available Pluxee tax benefit.

Understand Your Tax Slabs

The Indian income tax system operates under different tax slabs, each corresponding to a different income level. It is critical to grasp which tax slab you fall under, as this will dictate the percentage of tax you must pay on your earnings. Acquiring a firm grasp of your tax bracket will empower you to strategise and optimise your investments and expenses, maximising your potential tax savings.

Income tax slabs under new tax regime for financial year 2023-24

Invest in Tax-saving Instruments

There are several tax-saving instruments available in India that can aid you in decreasing your tax liability. Apart from Public Provident Fund (PPF), National Pension Scheme (NPS), and Equity-Linked Saving Scheme (ELSS), you can also invest in other tax-saving instruments such as fixed deposits, National Savings Certificates (NSC), and Pluxee tax benefit. By investing in these instruments, you can claim deductions on the amount invested and reduce your taxable income. For instance, investing in a Pluxee Meal Benefit can save taxes up to Rs. 12,000 per year while allowing you to enjoy tax-free meals at your workplace. Therefore, it is essential to evaluate the various tax-saving instruments' benefits and choose the ones that align with your financial goals and tax-saving requirements.

Claim Deductions

You can claim deductions for other expenses such as medical expenses, rent paid, and donations to charitable organisations. For instance, medical costs incurred for yourself or your dependents can be claimed as a deduction under Income Tax Act, Section 80D. Similarly, if you live in a rented accommodation, you can claim a deduction for the rent paid under Section 80GG. Additionally, if you have donated to charitable organisations, you can claim a deduction under Section 80G. Furthermore, if you have taken a home loan, you can claim a deduction for the interest paid on loan under Section 24.

Submit Investment Proofs on Time

Submitting investment proofs on time is essential as it helps your employer accurately calculate your TDS. TDS is the tax your employer deducts from your salary before paying you. The amount of TDS deducted depends on your salary and the investments you have made during the financial year. Therefore, your employer needs to consider these investments while calculating TDS. If you fail to provide investment proof on time, your employer may deduct more TDS, resulting in a lower take-home salary. Therefore, it is critical to ensure that you submit all your investment proofs before the deadline set by your employer.

Plan Your Salary Structure

Planning your salary structure can significantly impact your tax liability. When you join a new job or receive a raise, you should speak to your employer about the various options to structure your salary. For example, opting for a Pluxee Meal Benefit is an effective way to plan your salary structure. They can help employees save money on taxes by providing tax-saving benefits on meals, fuel, and telecom. Similarly, other options are available such as LTA (Leave Travel Allowance) and HRA (House Rent Allowance), which can help you save taxes and maximise your take-home pay.

File Your Taxes on Time

Filing your taxes on time is critical to avoid penalties and interest charges. In India, the tax year runs from 1st April to 31st March. You must file your taxes before the due date, usually 31st July, to avoid any penalties. Filing your taxes on time ensures that you take advantage of all opportunities for tax savings for employees, such as claiming deductions for investments made during the financial year. If you skip the deadline, you may have to pay penalties and interest charges, which can significantly increase your tax liability.

Final Thoughts

By investing in tax-saving instruments, claiming deductions, submitting investment proofs on time, planning your salary structure, and filing your taxes on time, you can optimise your taxes and enjoy tax savings. As a salaried individual, it is crucial to explore all available tax-saving options and choose the ones that best suit your financial goals and needs. Then, you can maximise your tax savings and enjoy higher take-home pay by taking the proper steps.