CTC Salary – How to increase Take Home Salary


CTC Salary – How to increase Take Home Salary
When you join any job, you are glad to hear about your pay. It may seem very satisfying. But at the end of the month when you get actual salary in your hand, it is very less after so many deductions of P.F., Employment Tax and many more stuffs.
Everyone would be trying to increase their take home pay i.e. actual cash the employee can take home from his so said salary. There are certain tips that can help you increase your take home pay:
          Initially be clever at choosing the allowances from the options allowed by your employer.
          When you are being offered a perquisite of insurance premium being paid by your employee, and that to specially mediclaim, you can think of taking the advantage from the same. You can talk to your employer and opt for low cost insurance if you are a healthy person.
          There is another option in which you have to put your extra efforts and that is you can work over – time i.e. time over and above your office hours. This will literally increase your take home pay.
          Be very sharp at collecting and submitting the evidences of the expenses made by you on behalf of your employer. This will be reimbursed by your employer their by resulting into increasing your take home pay.
          Tax Planning and Saving:  Tax Planning and Saving is the best option to increase your take home pay certain point related to tax to be kept in mind are as follows:
o   Opt for House Rent Allowance as against rent free allowance given by your employer. Because House Rent allowance is exempt as per the provisions of section 10(13A) while the Rent Free Accommodation is considered as perquisite and is taxed as per Rule 3(1).
o   The next option you may get is of fix medical allowance per month or reimbursement of the same when they are actually incurred. This will have the tax effect that fixed medical allowance is considered as perquisite under section 17(2) but the amount of medical reimbursement upto Rs. 15000 is allowed as a deduction under clause (i) and (ii) of the same section and section 17(2)(V).

o   Your salary is deducted by way of Tax deducted at source. Such tax is deducted by the employer and paid as tax to the government. For this purpose you must give all the details of any other deductions that you are eligible to claim. Such details can be:
§  Any loss on Income from House Property.
§  Interest paid on home loans and allowable as deduction under section 24b.
§  Any investment made that is eligible as deduction under section 80 C such as:
·         LIC Premium paid
·         Invested in Public Provident Fund
·         Deposited for 5 Years as fixed deposit in Scheduled Bank.
·         Repayment of principal amount of Home Loan
·         Invested in ULIP and many more
§  Details of Medical Insurance premium allowable as deduction under section 80 D
§  Remember to claim deduction of travel allowance for two years in a block of 4 Calendar years as per the provisions of section 10(5).
§  Certain portion of entertainment allowance is also allowed as a deduction under section 16(ii) if you are a government employee.
o   Thus the most important part is tax planning that plays a vital role in increasing your take home pay. Thus, start planning for such tax saving at the beginning of the financial year which will help reduce your tax burden thereby increasing your take home pay by lowering your tax to be deducted as source.

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  1. This write up is a useful guide for amateur professionals . Quite informative.

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