Tax Savings Is A Myth To Salaried Employees!

This write-up is in the context of the old tax regime!

What’s the maximum tax deduction a salaried employee can avail?

Standard deduction—Rs.50,000

Only the standard deduction mentioned above, and a few other deductions mentioned below under section 10 of the Income Tax Act 1961 are exclusive for salaried employees. Other deductions mentioned in this write-up can be claimed by all individuals.

Under section 80 of the Income Tax Act 1961

• By way of investments specified under section 80C of the Income Tax Act 1961—The maximum allowable deduction is Rs.1, 50,000. An additional deduction of Rs.50,000 under section 80 CCD is allowable if one had contributed towards NPS.
• By way of the health insurance premium paid under section 80D—One can claim up to Rs.25,000 towards health insurance paid for the individual and the family members and in case parents are senior citizens deduction up to Rs.50,000 is allowed. In addition to it, a maximum of Rs.5000 can be claimed for preventive health check-ups.
• Other sections of 80 of the income tax act like 80GG, 80E and 80G are allowable subject to conditions and at a cost.
• Deductions like HRA and LTA are allowable under section 10 of the Income Tax Act 1961 considering the expenses incurred by the individual towards rent and travel.

I thought consistency was important. Being a salaried employee, though income is stable the income growth is limited which don’t commensurate with the tax rate and cost of inflation & living!
Of course, we have the next tax regime to rescue! Though the process of filing the return under the new tax regime is simple, the amount of tax paid isn’t!

Let’s not even get into the discussion of indirect tax! The worst part is there is no way to keep track of how much indirect tax one pays!

Well! After all my bank balance doesn’t reflect how much I earn! Thanks to the tax, the cost of inflation and the cost of living!

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