How to Pay Zero Tax for Income from Salary Upto 15.22 Lakhs (Approx.) FY 2018-19

By Deepak Sethi, 3EA
How to Pay Zero Tax for Income

We have kept following points in mind:
1. For most benefit of HRA - It should be 50% of Basic salary (40% is good if rented houses are in non-metro).
2. Car Maintenance - The Company can reimburse Rs 1,800 per month for car less than 1600 CC (Rs 2,400 per month for bigger cars) along with Rs 900 per month for driver salary as tax free allowance. Transport Allowance is no more tax free (Budget 2018) but Car Maintenance reimbursement is.
3. Employer can have option of subscribing to both NPS & EPF. Keeping both makes salary more tax efficient, though take home may go down.
4. Gift Voucher worth Rs 5,000 per annum is tax free. Some companies give such vouchers at birthdays or anniversaries.
5. Company owned cars give much more tax benefit and hence is recommended for high salaries.

Let's take an example to understand how to calculate Zero Tax on the below Salary Structure


Now, below is the Calculation of Income Tax for Above Structure:


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Article by: Deepak Sethi, 3EA