Category: Spine Blogs

What is an “End to End” HR Solution you might ask.

An End to End HR Solution refers to an HR System which records and tracks the data of employees since the very beginning or onboarding or since they were hired. It keeps recording the data of the particular employee till the day of his/her exit.

 

Now that we  have a basic idea of what an “end to end” solution refers to, let us learn why is it necessary?

 

– Employee Life Cycle

 

“Onboarding to exit”, “Hire to retire” whatever you want to call it. Employee Life Cycle is the period for which an employee works at a particular organisation. It also includes the onboarding and exit processes. From the moment of onboarding till the full and final settlement is done and the money is received/paid by the employee, the Employee Life Cycle goes on.  From onboarding to exit, an end-to-end HRMS ensures the employee has no obstacles in communication with the employer. It also provides the required reports to the employer whenever required. For more information on ELC you can read What does Employee Life Cycle mean and how does an HRMS affect it?

 

– Grows With You

 

A Human Resource Management System, Being modular and flexible, grows as you do! Needless to say, having modularity makes an HRM system segment agnostic and boosts the compatibility of the system. You can add modules and make the system even more comprehensive as you grow as an organisation. If you would like to know more about scalability in HRMS, you can read How is a scalable HRMS better for your organisation?

 

– No Migration Required

 

Say you have to switch to a new solution provider just because you now have a huge force of employees and the solution provider does not have the adequate tech to manage so many employees. The amount of work and expenses incurred in the migration process would be overwhelming. What if you just had to update the system once? With Spine HR Suite, you can upgrade the system instead of migrating to a whole new system which cuts down your migration costs and boosts the data retention efficiency.

 

– Tied-in Analytics & Reports

 

An end-to-end/ Hire to Retire/ Onboarding to Exit or whatever you want to call it solution, stores the data of your organisation since the deployment of the system. The amount of reports you can generate when required, the depth of reports and the accuracy is unimaginable. When you have an End to End HR Management system deployed, you could care less about reports and analytics it provides.

 

To sum it up, End to End Human Resource Solutions are the way to go! You get numerous benefits which include cutting down migration and upgradation costs, bulk purchasing costs, report extraction costs and on the other hand you get the whole life cycle of your employee at a glance, extremely detailed and accurate reports (filtered, sorted and created according to your requirements) and much much more!

If you are looking for one such HRMS which would counter all your hR requirements, Spine HR Suite is the way to go! Click here to learn more about Spine HR Suite.

“Hire to Retire, Onboarding to Exit” you might have heard these phrases and thought what exactly do they mean and how do they affect your organisation and employees?

 

Employee Life Cycle is the period for which an employee works at a particular organisation. It also includes the onboarding and exit processes. From the moment of onboarding till the full and final settlement is done and the money is received/paid by the employee, the Employee Life Cycle goes on.

 

Okay but how does having a Human resource Management System affect the life cycle of your employees? Well Here’s how an HRMS affects your employees’ life cycle:

 

– Employee Onboarding

“Onboarding” refers to the processes in which new hires are integrated into the organisation. It includes activities that allow new employees to complete an initial new-hire orientation process, as well as learn about the organisation and its structure, culture, vision, mission and values. A Human Resource Management  System boosts the onboarding efficiency by automating the whole process. Besides that, an HRMS also liberates the HR, who can now focus on more productive tasks.

 

– Documentation

Once the new employee is onboard, various documents are collected. Identity card, Address proof, Bank Details and many more such documents are needed to be submitted for numerous purposes. The traditional way was to get a copy of each and every document and hand them over to the HR who would then update the employee master and call the onboarding process complete. But with an HRMS, just scanned copies are needed to be uploaded to complete the onboarding process. HR can collect physical copies whenever convenient.

 

– Surveys & Reports

The employer needs to ensure that the employee recruited is actually making progress and there is nothing hindering the growth of the employee. For this purpose, surveys are conducted and progress reports are made. Traditionally, Surveys were in the form of a face to face questionnaire which could make the employee nervous or even afraid of speaking the truth as a low level of confidentiality is maintained. With a HRM System, these surveys can be done online with a high level of confidentiality. On the other hand, there is no need for an HR or Manager to go out of their way to track and review the progress of the employee with an HRMS. The system auto generates progress reports and can view them as per the user’s liking and convenience.

 

– Exit

Exit, here refers to the exit of the employee from the organisation. Be it resignation, retirement or any other means. Exit of an employee might not sound like much at first glance but there is a lot more to it. Calculation of arrears, gratuity, loans and advances and other full and final settlement requirements. Having an HR System allows you to automate the calculation. Also, the employee can submit their resignation offline with the actual letter as an attachment and this can then be reviewed by the hierarchy set by the user. The HR can review or revoke the separation activity at any point of time and anywhere. Entire full and final settlement process can be managed to relieve the employees and the analytical reports can be generated for separation.

 

In conclusion, an HRMS lends the process automation which makes the entire process quicker, more accurate and efficient. From onboarding to exit, an HRMS ensures the employee has no obstacles in communication with the employer. It also provides the required reports to the employer whenever required.

If you want to manage your employees’ life cycle in an efficient and more advanced manner, Spine HR Suite is the way to go! For more information you can click here and visit Spine Technologies.

It is the “Tax Season” as people call it! And as a responsible citizen and taxpayer, you need to know a bit about taxes and their importance. So that is exactly what we are going to  discuss in this blog!

 

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To understand the types of taxes, first we need to know the incidence and impact of taxes. Incidence of tax. The final burden of tax is known as tax incidence and the initial burden of tax is known as tax impact. Simply put, the person who actually pays the tax is said to be impacted by the tax and the person who first passed on the tax liability is said to be incidental.

 

Now that we know about incidence and impact of taxes, let us take a look at types of taxes-

 

1. Indirect Taxes

The type of taxes where the incidence is on one person and the impact is on another. Indirect taxes can be passed on to others and usually make a lesser percentage of revenue. Examples of indirect taxes are excise tax, VAT, and service tax.

 

1. Direct Taxes

In case of direct taxes, the incident and impact is usually on the same person. This is because the taxes are deducted at the very source. These taxes make up the majority of tax revenue of the government. TDS, Professional Tax, Income Tax, Property Tax, etc are all examples of direct taxes.

 

 

• Why are taxes required?

 

– To Keep The Economy running

Running the country requires a huge capital. This calls for a huge revenue and with a working population as enormous as India, the rate of taxes can be much less. And needless to be said, Taxes are a huge part of the government’s revenue and revenue is an essential element in keeping the economy running.

 

– To Reduce Income Gaps

Taxes are designed with the canon of equity in mind which says that a tax should be made in such a way that it should be equitable to the payers, i.e. less rate of tax for payers in the lower income group and higher rate for high income groups. This directly helps in creating equity among people and reducing income gaps in the population.

 

– For Social Welfare

The primary goal of the Government of India is social welfare. And to take up projects of social welfare, the government needs huge amounts of funds. Tax revenue makes up the majority of these funds.

 

In conclusion, Taxes in India are classified into two types- Direct and Indirect. Taxes are necessary as it is the major source of income for the government. The government uses these funds for the welfare of people which leads to economic growth and development. Now that you know why taxes are important, you might also want to know what your taxes as an employee, i.e TDS is, you can read What is TDS and things you need to know about it!

IT Assets are often neglected as they fall in between the long term fixed assets and short term inventory in terms of durability.

 

If looked at from a different perspective, IT Assets are the core of an organisation. Be it laptops, desktops or just anti-virus software, IT Assets need to be tracked and managed like actual fixed assets. Here are 4 ways in which a Good FAMS will help you manage your IT Assets:

 

– Service Reminders

The IT Admins all collectively might agree on one thing that maintaining a date sheet to track IT Hardware is one hectic job. What if this tedious task was performed by a software/ system? A Fixed Asset Management System ensures that you never miss out on any of your asset services due. Get automated reminders for whenever your IT infrastructure like laptops, desktops, biometric systems, etc call for service. No more stress to the IT Admin with Email and pop-up reminders for every asset to the Admin as well as the employee the asset has been allocated to!

 

– Expiry and Renewal Notifications

It is one thing to keep a track of hardware service due and another thing to ensure that all the softwares is up to date, running and the respective certificates are not expired. SSL and SQL Certificates also need to be renewed. With a Fixed Assets Management System, the IT Admin can focus on other important tasks while the system tracks the expiry and renewal of such software and encryption certificates.

 

– Hardware Tracking

“Which asset is allocated to which employee in which department?” Now that is something you will not need to worry about with a Fixed Assets Management Software. You can generate and allocate a barcode to each and every IT Asset and track it. You can issue the barcode for every change in asset and the employee allocated to have an accurate track of the asset. This saves time as one can know which employee the particular tech is allotted to by just scanning the code. Not only that, one can also know the department of the employee and the period for which the asset is issued.

 

– Asset Allocation

Talking of allocation, Asset Allocation is another major reason you should consider getting a Fixed Asset Management System. Allocating assets with proper barcodes/ QR Codes/  RFID Tags allows you to accurately track assets, more importantly IT Assets which tend to move more frequently in an organisation. Allocation of assets also helps in making the workflow easier by ensuring that the proper employee has the proper asset.

 

In short, A FAMS helps an organisation manage it’s IT Infrastructure by keeping a date sheet and reminding and/or notifying about renewals/ expiry/ service dues, by Helping them track the IT Assets and by assisting in allocating the proper asset to the proper employee.

 

If you are looking for a FAMS which excels in the above mentioned necessities, you should consider Spine Assets. Spine Assets not only covers the 4 basic necessities but also offers many more features that will help your organisation boost its asset management efficiency.

A payroll system is a software to automate the payroll process. These systems can be integrated with leave and attendance tracking systems and employee self-service portal and are used to keep track of employee’s working hours, calculate salaries, calculate taxes and deductions, print payslip, etc.

 

Now, talking about an all round payroll system, here are the 9 features that an efficient payroll must have:

1.Quick and Accurate Calculation

 

If it was not obvious, a good Payroll system must be efficient, quick and accurate in providing calculations. The primary function of a payroll is to make accurate calculation of salaries and wages easier for the accounts department and quick disbursement of the same for the HR Department.

2.Arrear Calculation

 

Another important factor to keep in mind while calculating salaries and wages is to consider outstanding and/or advance payments or commitment of the same. An efficient payroll solution shall help you with arrear calculations which would work in favour of both you as an employer and your employee.

3.Integration With Time and Attendance

 

Integration with Time and Attendance is another basic necessity of a payroll. To function efficiently, a payroll requires a report of employees’ attendance, leaves and shifts. This is required in order to calculate the employee’s salary based on the days filled in by them.

4.Employee Master Database

 

An efficient payroll system must be enabled by a strong employee master database. Employee master consists of all the necessary information about the employee like bank details, contact number and much more. An Employee Master is a crucial element of a payroll and the user must be able to easily create, edit and retract employee master databases.

 

5.CAGR (Compound Annual Growth Rate)

 

A feature that not many payroll systems offer is calculation of CAGR or Compound Annual Growth Rate. It refers to the growth a particular employee has made over the course of the year. This feature is necessary as it helps track employee progress and also helps in deciding whether the employee should be incentivised or not depending on his work.

6.Component Setup

 

A good payroll system must allow the user to create their own sets of CTC structure and breakdowns which vary greatly from industry to industry and company to company. This also helps in quick salary calculation as employees can be grouped under a CTC Structure designed specifically for them.

 

7.User Defined MIS

 

MIS reports are essential for the employer as well as the employee. Payslips, Reports, Letters and other important documents are available in just a few clicks given that the payroll system is efficient. This makes the employee self sufficient and HR Empowered as well.

 

8.Analytical and Graphical Reports

 

Can we all collectively agree that reports are crucial to an organisation? Be it employee performance reports, annual expense reports, annual growth reports or salary reports and breakdowns of employees a good payroll system should generate these in a matter of seconds. Even better if the system allows you to filter through the reports and drill down to a particular designation in a particular department.

 

9.Daily Aggregate and PLB

 

One more not-so-common feature in a payroll is Daily Calculation of wages. There are numerous organisations which provide employment on a daily wage basis. Calculation of such wages can be hectic and sometimes even more complicated than the traditional method if done by a non-efficient payroll. But a dynamic payroll solution will help you pacing up this process.

 

On an ending note, one should look out for a Payroll which allows flexibility to the user. A dynamic payroll is the one which allows user personalisation in every aspect while being standardised enough to be segment agnostic. Spine HR Suite offers you a payroll which checks all the 9 boxes and ensures the best in class payroll processing experience.

 

“Old Regime or New Regime? Which one should I choose?”

Now that is the kind of panic we are going to tackle in this blog. After you are done reading this blog, you will know the differences between the two regimes and which one should you opt for to save your taxes!

 

The Differentiation:

Let us go through the difference between the two regimes and the tax slabs, deductions and exemptions under them.

• Old Regime –
• Many Deductions and Exemptions
• Higher Tax Slabs

 

• New Regime –
• No Deductions and Exemptions
• Lower Tax Slabs

 

Now that we have the difference out of the way, let us now talk about the regimes as a whole;

 

• Old Regime

 

The Old Tax regime provides that, for the annual income up to Rs. 2.5 lakhs there is a total exemption, 5% for personnel with annual income between Rs. 2.5 lakhs to Rs. 5 lakhs. 20% for income group between Rs. 5 lakh and Rs. 10 lakh and 30% for taxpayers belonging to the income group of Rs. 10 lakhs and above

 

Synopsis-

Nil for up to 2.5 Lakhs
5% for 2.5 to 5 Lakhs
20% for 5 to 10 Lakhs and,
30% for 10 Lakhs and above.

 

• New Regime

 

The new tax regime is different in two ways from the old one. Firstly, it has more slabs with lower tax rates. And secondly, all the major exemptions and deductions available to taxpayers in the existing (old) tax regime are not allowed if the new tax regime is chosen.

 

Following is a table which shows the new tax slabs as well as the difference between Older and Newer tax slabs according to the respective regimes.

 

 

Annual Income (Rs.)	Old Tax Rate	New Tax Rate
Up to Rs. 2.5 lakhs	Nil	Nil
Rs. 2.5 lakhs to Rs. 5 lakhs	5%	5%
Rs. 5 lakhs to Rs. 7.5 lakhs	20%	10%
Rs. 7.5 lakhs to Rs. 10 lakhs	20%	15%
Rs. 10 lakhs to Rs. 12.5 lakhs	30%	20%
Rs. 12.5 lakhs to Rs. 15 lakhs	30%	25%
Rs. 15 lakhs and above	30%	30%

 

 

How to choose a regime such that I can save taxes?

 

To make things simpler, we have broken down the process into five simple steps which go as follows:

 

• Know the income group you belong to.
• Know your investments and deductions applicable.
• Calculate the tax payable according to the Old Regime and apply for all applicable deductions and exemptions.
• Calculate the tax payable according to the New Regime (be careful and aware of your income group you fall into, refer to the table above for more information).
• Compare both the amounts and select the one with lower tax payable.

 

And just like that you have countered the hassle of selecting the best Tax Regime for you in just five simple steps!

 

But you know what? Instead of going through the five steps, what if there was a tool which calculated and compared your taxes payable according to both regimes at just one click? That is exactly what Spine HR Suite’s Tax Calculator Offers you! You can learn more about Spine HR Suite here!

Form 26AS is a statement that provides details of any amount deducted as TDS or TCS from various sources of income of a taxpayer. It also reflects details of advance tax/self-assessment tax paid, and high-value transactions entered into by the taxpayer.

Form 26AS is a statement that shows the below information:

1. Tax deducted on your income by all the tax deductors
2. Details of tax collected by collectors
3. Advance tax paid by the taxpayer
4. Self-assessment tax payments
5. Regular assessment tax deposited by the taxpayers (PAN holders)
6. Details of income tax refund received by you during the financial year
7. Details of the high-value transactions regarding shares, mutual funds, etc.
8. Additional details like mutual fund purchase and dividend, interest on income tax refunds, off-market transactions, foreign remittances, salary break-up details, etc.

 

Following are the Components of Form 26:

 

Part A:

(Details of Tax Deducted at Source)

 

Part A of Form 26AS contains TDS details deducted on your salary, interest income, pension income, prize winnings, etc. It also includes the TAN of the deductor, the amount of TDS deducted and deposited to the government. This information is provided every quarter.

 

Part A1:

(Details of Tax Deducted at Source for 15G/15H)

 

Details of income where no TDS has been deducted is given here since the taxpayer has submitted Form 15G or Form 15H. You can verify the status of TDS deduction if you have submitted Form 15G or Form 15H. If you have not submitted Form 15G or Form 15H, this section will display ‘No transactions present’.

 

Part A2:

(Details of the entries are mentioned here:)

 

• TDS on sale of immovable property u/s194(IA) (for the seller of property)
• TDS on rent of property u/s 194IB (for the landlord of property)
• TDS on payment to resident contractors and professionals u/s 194M (for a payee of resident contractors and professionals)

That is, it will show entries if you have sold the property/rented the property, received payments for contractual or professional service during the year, and TDS was deducted on the same.

 

Part B:

(Details of Tax Collected at Source)

 

Part B shows the Tax Collected at Source (TCS) by the seller of goods. Entries in Form 26AS will show seller details who has collected tax from you.

 

Part C:

[Details of Tax Paid (Other than TDS or TCS)]

 

If you have deposited any tax yourself, that information will appear here. Details of advance tax as well as self-assessment tax are present here. It also contains details of the challan through which the tax was deposited.

 

Part D:

(Details of Paid Refund)

 

If any, information regarding your refund will be present in this section. Assessment year to which the refund pertains, along with the mode of payment, the amount paid and interest paid, and the date of payment are mentioned.

 

Aside from these, there are 4 more parts, namely E, F, G and H. But as an employee, parts A through D are necessary for you as they reflect your Taxes paid, payable, refunded and refundable. You can then, having a certain vision and clarity, plan your investments and file your returns.

 

If you are an employer and you are looking to make things like tracking and filing of TCS and TDS easier, in fact automated, Spine HR Suite is the tool you are looking for! With intelligent Payroll, Tax Calculator, Performance Manager, Regulatory Compliance tracker and many more useful features, Spine HR Suite is the one stop solution for all your needs!

It is the tax paying season again. But this time, we ensure that you as an employee are aware about the Form 16 and how it affects you.

 

Starting off, let us understand what exactly is Form 16 and how it aids you as a salaried employee. Form 16 is an income tax form used by companies to provide their salaried employees the information about the tax deducted. It can also be considered as the TDS certificate. When Form 16 is provided to an employee by their employer, it is considered as a source of proof of filing their Income Tax Returns. And if your income does not fit the basic exemption limit which is Rs. 2,50,000, the employer does not deduct any TDS in that case.

 

Component of Form 16

 

• Refunds in any to the employee, or balance of taxes payable by the employee.
• Details of the employer like collection Account Number (TAN), name, PAN, Tax deduction etc.
• All details of the Tax Payment, like amount, Challan number, cheque number, Demand Draft number etc.
• Personal details of the employee, like name, Permanent Account Number (PAN) etc.
• Acknowledgement of the number of the taxes paid by the employer.
• Taxes deducted as per sections 191A.
• Total income and tax deductions.
• Details like salary, net salary, Gross salary, perks, deductions, etc.
• TDS receipt paid.
• Declaration of tax payments from the employer.

 

Form 16A

 

Also known as part A of Form 16, Form 16A can be generated and downloaded from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) Portal. Before issuing this certificate, the employer must ensure the authenticity and correctness of the it’s contents. It is vital for you to get a separate Part A of Form 16 for the period of employment if you have changed your job. Following are the components of Part A of Form 16:

 

• PAN details of the employee.
• PAN & TAN of the employer.
• Employer Name and address.
• Summary of tax deposited and deducted quarterly, certified by the employer.

 

Form 16B

 

Form 16B is an annexure to Part A. In case you happen to change your job in one financial year, you will have to decide if you need Part B of the form from the last employer or from both the employers. Following are the components of part B of Form 16:

 

• Relief under section 89 (recalculating tax for the year in which arrears are received and the year to which the arrears pertain; and the taxes are adjusted in the year in which they were due)
• Detailed breakup of salary.
• Deductions that are allowed under the income tax act (under chapter VIA)

 

Required Details for Form 16

 

• Tax Payable or Refund Due
• Taxable Salary
• Aggregate of Section 80C Deductions (Gross & Deductible Amount)
• Breakup of Section 80C Deductions
• TDS (Tax Deducted at Source)

 

In conclusion, The Form 16 acts as a proof of tax payment for the employee and also provides the employee a much better view and breakdown of their salary and taxes deducted. Where organisations struggle to generate and disburse such forms if they even issue them in the first place, Spine HR Suite helps the employer automate the issuing of Form 16 and help enhance many other HR and Payroll Processes! You can learn more about Spine HR Suite here!

Income Tax is a crucial source of revenue for the government of India. Thus, it is highly essential for citizens to pay their taxes on time. While most people are aware of the significance of paying taxes, few understand the steps to produce our taxes on time. Many are yet to be mindful of their rights and how they can claim exemptions. The jargon like VAT, GST, stamp duty, and self-assessment tax bewilders most of us. You can easily calculate essential information from online tools such as VAT, GST, Stamp duty calculators that are available online. 

 

Are you also confused about the different declarations you are asked to make by your employers at the beginning of every financial year? How is it related to your TDS? Also, what is the difference between the investment made and investment declarations? Well, we are here to clear all your doubts with this article. 

As per income tax department regulations, you need to make your investment declarations at the beginning of every financial year. So HR will ask you to make your declarations at the start of the financial year. And it is indeed important for capital gains tax deduction on your monthly salary. It is a good thing as it allows you to get more in-hand compensation every month if done wisely. So you need to be as serious about investment declarations as you are about investing.

 

The core difference between a declaration of investment and actually making it is that all you need to do is mention the assets you intend to make in declarations. Here, your actual investment may be more or less than this. In addition, you don’t need to present any proof until the end of the financial year. 

 

Deduction

Let’s start with what investment deduction comprise of:

 

• House Rent Allowance- If you pay any rent for your home, you can claim HRA. 
• Leave Travel Allowance- It is available to employees and their salary package and is applicable for domestic travel only. 
• Home Loan- You can claim a tax deduction on the interest of your paid or payable home loan by filling in details of interest and other documentation in form 12B. It can be a very significant deduction during income tax e filing as we generally have to pay a lump sum interest on home loans. 
• Deduction under Section 80C, 80CCC, 80CCD, 80D- This Section consists of the different deductions allowed to citizens, such as the premium paid on life insurance, medical insurance, education loans, annuity plans. You can also display your donations, contributions to NPS, and even interest on savings accounts in your incometaxindiaefiling. You can plan the deductions you would like to claim using an income tax calculator. 

 

Form 12

When an employee wants to claim deductions, they need to fill out the form, which will act as a statement of claim by an employee for deduction of income tax. For example, a salaried employee must submit form 12 BB to claim tax benefits or rebates on investments and expenses. It applies to all taxpayers and must be submitted at the end of each financial year. Along with this, the employees also need to submit documents and proof to back their claims. 

 

The employees need to submit the exemptions and deductions they wish to claim. The employer can deduct TDS on the salary based on these deductions. If done correctly, employees can enjoy more cash in hand. The form must be submitted to your employers and not directly to the Income Tax Department. Thus, form 12BB is helpful in the TDS calculation for the entire year. It is also possible to claim excess TDS deducted by filing your income tax return. Most of the deductions come under Section 80C of the Income Tax Act, which has an annual limit of Rs 1.5 lakh. Other deductions under 80D and section 124 can also be claimed. 

Thus, investment declarations are vital for meeting your financial goals and saving more money as it leads to lower taxes and higher salaries every month. 

 

Here comes that time of year that both employees and employers dread. Yes, you guessed it right! The end of the financial year. It is probably the most stressful time that sends many employees into a frenzy. It is when employees need to calculate year-long taxes, they need to shell out. In India, you may have to pay a considerable proportion of your income as tax. The end of the financial year is around the corner, and it is time to assess our income for tax calculation. But fret no more! The saying goes, “a penny saved is a penny earned.” We have brought you some highly effective methods to save your tax on your capital gains tax or even tax-free income to make the most of your salary. 

The beginning of the assessment year for income tax e filing will commence shortly. However, several employees are clueless about finance and IT e-filling. In this blog, we will answer common questions such as: What are the particulars in form 16? What are TDS, GST and VAT? Why does HR ask for several declarations at the beginning of the year? We aim to familiarize you with most of these concepts in the blog.

 

Paying close attention to save your tax might help you keep a good deal of money for yourself. Income Tax Department requires you to display your income every year. Before we talk about the different ways to save your tax, let us know more about the components that our salaries consist of:

 

• Basic Income
• House Rental Allowance
• Special Allowance
• Leave Travel Allowance

 

These components sum up your gross salary. Then comes deduction, which is essential to plan well to save your tax on your income. Since we have our foundation cleared, let’s come to the point. Here are some ways to save your taxes on income:

House Rental Allowance:

Basic income generally amounts to 30-35% of our total income. There are three formulas for HRA, such as:

 

1. The house rent allowance is the basic amount
2. 40% (for non-metro city residents) or 50% (for metro city residents) of your basic salary.
3. The actual house rent without 10% of your basic income.

 

The least out of the three is considered a deduction from the HRA amount. You don’t need to worry about these calculations as you can easily do them with a tax calculator. In addition, under Section 80 GG, you can claim your housing rent even if it is not mentioned on your salary slip.

 

Provident Fund:

Section 80 of the Income Tax Act gives you multiple deductions to reduce your taxable income as much as possible. Under Section 80 C, you can deduct up to Rs 1.5 lakh every year from taxable income. A salaried employee income plan has the component of a provident fund. The contribution of your Provident Fund can be added to this deduction. 

 

Equity Linked Saving Scheme:

If you have invested in an ELSS or Equity Linked Saving Scheme, you can invest in a mutual fund for three years. Their investment is locked for three years so that you can avail of tax benefits from the government. It is a way of government to encourage citizens to invest in mutual funds. 

 

Tax Saving Fixed Deposit:

It is one of the most popular savings options, as it can allow your money to work for you in several ways. Such kinds of FDs have a lock-in period of 5 years. Here, you can claim tax deductions on your tax-saving FD under Section 80 C. 

 

Home Loan:

If you have availed of any home loan, it can also help you with the tax deduction on your income. The principal amount you have paid on your home loan in that year can also be claimed for deduction. 

 

Life Insurance Premium:

Getting life insurance has become inevitable in uncertain times. According to Section 80 CCC, your life insurance premium can also be deducted from your total tax payable income. 

 

Saving Interest Income:

This applies to the interest that you earn from your savings account. You can claim up to 10,000/- for your tax deduction. Thus, it is interesting that your simple savings account investment can also contribute to your tax deduction. 

 

Education Loan:

Section 80 E relates to the deduction for the repayment of Interest on Education Loans up to 8 years. It is a long period to pay off your loan. So, it can be beneficial to you in several ways. 

 

Medical Insurance:

The sedentary lifestyle, unhealthy choices and irregular cycles, and other environmental factors have resulted in a rise in several health conditions. Health insurance has been a necessity in modern times. However, it is possible to claim deductions for premiums paid under Section 80 D deduction. Up to Rs 25,00 can be deducted if the insurance is for your spouse, children, and yourself. Another 25,000/- limit can be added to the deduction if you include your parents under 60 years of age in the scheme. A further 50,000 is added if your parents are over 60 years old. In addition to providing you with insurance, it also allows you to save on taxes simultaneously. 

 

It is vital to save your tax with the same discipline as your investment. Make sure that you claim your deductions extremely diligently in order to avoid unnecessary stress and hassles at the end of the financial year.