This story is from January 18, 2019

TDS deduction: How to reduce Tax Deducted at Source from your salary

As the Financial Year is at the verge of ending, employees are asked to produce their ‘Income-tax declaration' with details of their investments and expenses, which they incurred during the FY gone by. Based on such declaration, the employer makes tax deductions at source on regular basis, either by deducting further taxes or deducting fewer taxes for the remaining period depending on the actual proofs of investments/savings showed by the employee. However, there are a few things that you can do to reduce your tax liability that arises from TDS being deducted from your salary.
TDS deduction: How to reduce Tax Deducted at Source from your salary
As per the income tax laws of India, an employer always deducts Tax Deducted at Source (TDS) from the employees' salary, if the salary income crosses the threshold limit.
As the Financial Year is at the verge of ending, employees are asked to produce their ‘Income-tax declaration' with details of their investments and expenses, which they incurred during the financial year gone by.
Based on such declaration, the employer makes tax deductions at source on regular basis, either by deducting further taxes or deducting fewer taxes for the remaining period depending on the actual proofs of investments/savings showed by the employee.

However, there are a few things that you could do to reduce your tax liability that arises from TDS being deducted from your salary.
  • Leave Travel Allowance

Similarly, if your salary break-up does not include travel allowance, you can always request your employer to include the same in your salary break-up. Every taxpaying citizen should be incurring the travel allowance expenses, before claiming an exemption.
  • Mediclaim Premium

Employees may furnish an 80D tax certificate from insurance companies in support of deduction of premium paid along with copies of correct bank statement/passbook furthering the proof of such payment. Further, an employee may also produce receipts/bills for any health routine check-up undergone during the FY.

  • House Rent Allowance

In order to claim this allowance, an employee is expected to produce particulars, such as name, address and PAN of the landlord and that too in the cases where the aggregate rent paid during the FY exceeds Rs 1 lakh. In case PAN of the landlord is not available, a declaration in Form number 60 should be obtained.
  • Interest On Loan Taken For Residential Property

In this case, particulars, including name, address and PAN of the lender, a certificate from the bank or authorized institution having the details like date of availing loan, installment amount and interest chargeable need to be submitted.
  • Food Coupons

If your company does not provide food coupons, you can ask them to consider a proposal. A sum of Rs 50 per meal is exempt on meal vouchers. This means that for a 25 day a month working period, meal vouchers can be tax-exempt to the extent of Rs 2,500 per month, considering lunch and dinner (Rs. 100 x 25 days).
  • Tuition Fees

Copies of the receipt mentioning the tuition fee receipts that is duly signed or stamped by the educational institution.
  • Donations

In case you have given certain funds to authorised trusts, charitable institutions like notified temples, Prime Minister's National Relief Fund, National Defence Fund, etc., an employee could submit the proof of donation in the form of a receipt containing all particulars like Name and address and PAN of trust or institution, Name of donor, Registration number, and its validity.
  • National Pension System (NPS)

A copy of deposit receipt for the amount deposited during the Financial Year and a copy of a relevant extract of the bank statement.
  • Saving TDS through Sec 80C benefits

Apart from the above, to save TDS on salary make sure you utilize the entire amount by investing in section 80C and other instruments. Among the most preferred routes to reduce your TDS or tax liability from salary would be investing in PPF. The Public Provident Fund (PPF) offers you a tax rebate of nearly Rs 1.5 lakhs per annum.
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