Employee Tax Benefits – 12 salary components that can help employees save tax

Some of the most popular benefits that companies offer to their employees and help them save tax on income include:

• Gift vouchers: An organization can offer up to INR 5000 per year as gift vouchers.

• Phone and internet bills: As per law there is no set cap on these expenses. Thus, it is at the discretion of the company to offer these employee benefits and set limits.
• Medical insurance: Some employers offer medical insurance that covers employees, their dependent parents, spouse and children. At times, you might have to pay an additional premium to get the coverage.
• Meal / Food vouchers: You might have come across Sodexo meal pass, which is one of the most popular options when it comes to offering meal vouchers.

• Leave Travel Allowance (LTA): LTA is another allowance which can help your employees claim deductions. This covers expenses that employees incur while taking their time off work.

• Book materials: Certain companies allow their employees to purchase books, journals, newspapers etc. and receive a tax exemption on it.
• Fuel allowance: Few companies allow their employees to reimburse their petrol or diesel expenses, which they spend for coming to the office and going back.

• House Rent Allowance (HRA): The HRA component helps employees with their rent that they pay for their house. HRA should be a component of your salary so that you can claim reimbursements.
• Allowance for Children's education: Employees can avail a children education fee or INR 100 per month or INR 1200 per year under this allowance.
• Allowance for uniform: Should your company require you to wear a specific uniform to work on a daily basis, you can make claims related to the purchase of clothes or uniform.
• Allowance for hostel expenditure: Parents can make additional claims apart from education expenses for their children. As per the rule book, you can claim up to INR 300 per month or INR 3600 per year for one child.
• Employee provident fund: As per the EPF act, 2% of an employee’s basic salary and dearness allowance combined must be contributed to the EPF of an employee.

You can get the complete guide to Employee Tax Benefits in India on Koppr.