How to cut tax outgo by over Rs 1 lakh! From LTA & travel reimbursements to meal coupons and driver salary – top 10 perks you shouldn’t miss

Mar18,2024



Tax Tips to Cut Your Tax Expenses: It's the end of the financial year and within a few months it will be time to file your taxes. Income tax Returns for the financial year 2023-24 (AY 2024-25). If you want to reduce your tax expense, it's important to look at certain benefits you can take advantage of (depending on the benefits your employer offers!).
For a taxpayer falling in the 30% tax bracket, availing just 7-8 of the 10 benefits listed below can help reduce the annual tax liability by more than Rs 1 lakh. An important point to note is that although some allowances have predefined limits, for others the amount claimed must be reasonable. Receipts or bills are required to claim tax exemption. Let's take a look at the 10 benefits of tax cuts listed by ET Wealth:
1. Leave Travel Allowance: Leave Travel Allowance (LTA) allows employees to travel within the country for holidays with their families. payment Of traveling expensesAwarded on submission of actual bill, including road, rail or air travel. It is important to note that the unclaimed amount is subject to taxation, and employees can avail of LTA Twice within a block of four years. The annual tax-free limit for LTA is Rs 1,00,000.
2. Fuel and Traveling Expenses: Reimbursement for travel and fuel expenses is available for those who need to travel for work. Employees must provide actual bills to claim this allowance. Fuel allowance capped at Rs 2,400 to facilitate commuting between work and home for sedentary workers with office jobs. The annual tax-free limit is Rs 28,800.
3. Vehicle Maintenance and Driver Salary: Employees can claim allowances for vehicle maintenance and driver salary which they use for official purposes, with a monthly limit of Rs 3,300. The annual tax-free limit is Rs 39,600.
4. Telecom Reimbursement: Reimbursement of telecommunication expenses, including landline, internet and mobile phone bills, is tax-free up to Rs 36,000 annually on submission of actual bills.
5. food coupons, Meal coupons are provided for a tax-free meal allowance of Rs 50 per meal, amounting to Rs 2,200 per month for two meals during working days. The annual tax-free limit is Rs 26,400.
6. Books and Magazines: Reimbursement for books, magazines, newspapers and online subscriptions is tax-free, supported by actual bills, with an annual limit of Rs 24,000.
7. Learning and Development: Companies can cover the cost of online or offline courses to enhance employee skills, up to Rs 48,000 annually, tax-free on bill submission.
8. Uniform Allowance: Maintaining a professional appearance in the workplace is important, and some employers offer an allowance to cover the cost of work attire. To claim this allowance, employees must provide receipts as proof of purchase. The annual tax-free limit is Rs 24,000.
9. Gadgets and movable property: This feature gained popularity during the work from home period. Companies purchase goods in their own name and make them available to employees for personal use. The annual tax-free limit is Rs 60,000.
1O. Scholarship Fund: Companies may offer monthly or annual scholarships to assist in the education of eligible children of employees. This financial aid is specifically designated for education-related costs such as tuition fees, books and study materials. The annual tax-free limit is Rs 60,000.



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