Have a CTC of over Rs 17 lakh? You can still pay zero tax just by rejigging your salary structure: Here's how
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Harsh Bhuta, Partner of Bhuta Shah & Co., a tax consulting firm, says, «Under the new tax regime, there are certain allowances in the Income Tax Act that can help taxpayers to rejig their salary structure. These allowances are exempt from tax in the new tax regime if certain conditions are met. These allowances can help taxpayers to reduce taxable income under the new tax regime.»
Reimbursements that are exempt under the new tax regime
Here are some of the allowances that can help a taxpayer in restructuring his salary structure and reducing taxable income:
1. Conveyance reimbursement: The Income Tax Act allows employers to reimburse expenses made by employees for performing his/her job. Bhuta says, «The conveyance reimbursement received by an employee is exempt if the same is expended while commuting to the workplace. An employee is required to submit bills to claim reimbursement.»
2. Transport allowance for specific employees: The Income Tax Act allows transport allowance for specially-abled people. The transport allowance is different from the conveyance reimbursement. Transport allowance is an allowance for travelling between residence and place of work. Bhuta says, «The transport allowance received by specially-abled employees is exempted up to Rs 3,200 per month or Rs 38,400 per annum. Only those specially-abled employees are exempted if
