Income Tax Calculator: The new financial year is going to start from April 1, and with this, your annual income up to ₹ 12 lakh will become tax free. After applying the standard deduction of ₹ 75,000, this figure reaches ₹ 12.75 lakh. But if your income is ₹ 17 lakh, will you have to pay tax?
You may think that it will be mandatory to pay tax on this income, but it is not so. It is true that in some ways you can avoid tax even on income up to ₹ 17 lakh. Let's know-how—
How to make tax free income up to ₹ 17 lakh in the new tax regime?
The government has made income up to ₹ 12 lakh tax free under the new tax regime. However, the exemption available under Section 80C is not available in this system. But according to the Economic Times report, by taking advantage of some additional exemptions, you will not pay any tax even on income up to ₹ 17 lakh.
1. Exemption on Commuting Allowance in CTC
The total salary that companies pay to their employees is called CTC (Cost To Company). Some part of this is given as Commuting Allowance. According to tax consulting firm Bhuta Shah & Co, if you choose the new tax regime, you will not have to pay tax on this travel allowance. But this exemption will be available only if this expense is incurred in traveling for office work.
2. Transport allowance given to disabled employees
In some companies, special employees are given ₹ 3,200 per month as travel allowance, i.e. ₹ 38,400 annually. This exemption is available only to those employees who are physically handicapped.
3. Discount on telephone and internet bills
According to Yogesh Kale, Executive Director, Nangia Andersen LLP, tax exemption is available on telephone and internet bills in both the new and old tax regimes. The special thing is that there is no upper limit for this exemption.
4. Tax exemption on car lease
Car lease is an agreement in which you use the car for a fixed period and make monthly payments for it. After the lease period ends, you can return or buy the car.
If your car has up to a 1.6 liter engine, then tax exemption of up to ₹ 1,800 per month is available.
This exemption is available to those employees to whom the company leases the car for official or personal use.
How to get tax free benefits on income up to ₹ 17 lakh?
Combining all the above-mentioned methods, if you are in the new tax regime and do the right planning, you will not have to pay any tax on income up to ₹17 lakh.
Conclusion:
If you follow the new tax regime and avail of all these deductions, you will not pay any tax on annual income up to ₹17 lakh. Therefore, it is important to plan your salary structure correctly to save tax.
