Tax Saving options for Salaried Employees in India - Kotak Life

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

How to save tax for salaried person?

The end of the financial year is near. You may explore various options to reduce your tax liability

  • Jun 16, 2022

The end of the financial year is near. Many people are now scampering around looking for avenues to claim a refund on paid tax. You may explore various options to reduce your tax liability. The Government of India allows numerous exemptions and deductions under various sections of the Income Tax Act, 1961 to lower your taxable income, and subsequently, your tax liability.

In case you are a salaried employee seeking to save tax, look no more. We have a comprehensive list of tax saving options ready for you.

Invest In Term Insurance Now

9 Tax Saving Option for Salaried Individuals:

Submit medical bills on time

The Income Tax Act, 1961 allows medical bills of salaried employees that are reimbursed by their employers to be exempted from tax. You may avail of a maximum of up to INR 15,000 for a financial year by seeking reimbursement of medical bills for self, spouse, and dependent children. You may also submit medical bills of your parents or siblings in case they are wholly dependent on you. Submitting such medical bills reduces your tax liability considerably.

Request for transport allowance as a part of your salary

Employees who do not receive transportation facilities from their employers may seek transport allowance. This type of allowance is offered by employers in order to compensate their employees for their travel to and from their residence to their workplace. Under Section 10(14)(ii) and Rule 2BB of the Income Tax Act, you may avail of an exemption up to INR 1600 per month, which sums up to INR 19,200 per annum. Blind and handicapped employees may seek a maximum of INR 3200 as transport allowance exemption per month.

You may also avail of tax exemption on conveyance allowance used to meet expenditure while performing office duties. Conveyance allowance is exempted up to the extent of expenditure incurred.

Enjoy exemptions under Section 10(14)

Besides transport and conveyance allowance, you may avail of numerous other exemptions under section 10(14). These are exempted to the extent of the expenditure incurred. Some of them include:

  • Helper or assistant allowance
  • Uniform allowance
  • Research allowance for the purpose of academic research
  • Allowance for cost of travel on tour or transfer

Claim exemption for Leave Travel Allowance (LTA)

LTA is offered to employees to cover any sort of travel expenses while on a leave from work. The LTA tax break may be enjoyed only while travelling within India. You may claim this benefit for travel of self as well as family members, which include your spouse, children, as well as parents and siblings who are completely dependent on you. Section 10(5) of Income Tax Act stipulates deductions of Leave Travel Allowance.

LTA is subjected to the following rules:

  • You may avail of exemption on 2 journeys in one block of 4 years
  • For railways, you may consider the cost of an A.C. first class coach, while you may avail of an economy class of national carrier in case of an air travel
  • The exemption amount is lower than the spent amount to reach your holiday destination via the shortest route or the actual amount received from the employer

Avail of tax benefit on children education allowance

In case your employer is offering a perquisite of education facility for your children’s study, you may claim tax benefit up to a certain limit. Fixed education allowance is tax exempt up to a limit of INR 100 per month for a maximum of two children. You may also enjoy tax benefit of up to INR 300 on an allowance that is paid towards hostel fees for a maximum of two children. Additionally, you may also avail of tax deductions for fees paid under Section 80C of the Income Tax Act.

Claim House Rent Allowance

Most employees have House Rent Allowance (HRA) as a component in their salary structure. You may claim HRA as a tax benefit to meet your accommodation-related expenses. You may avail of tax benefits of HRA under Section 10 (13A) of the Income Tax Act.

It is important to note that the entire HRA amount is not always completely exempt from tax. The exemption is a minimum of any of following three:

  • Actual House Rent Allowance received by your employer
  • Rent paid minus 10% of your salary
  • 50% of salary in case you are residing in a metropolitan city, or 40% if you are living in a non-metro city

You may claim HRA tax benefit only for the period during which you have occupied the rented house. It is imperative to submit the rent receipts or the rental agreement in order to avail of exemptions on House Rent Allowance. In case the rent paid is more than INR 1 lakh per annum, which works out to INR more than 8333 per month, it is mandatory to report the Permanent Account Number (PAN) of the property owner while seeking an HRA exemption.

Ask for food coupons

Food in office premises or that provided by the employer is not taxable if the cost to the employer does not exceed INR 50 per meal. Besides, snacks and non-alcoholic beverages provided by the employer during working hours are considered as tax-free perquisites.

Utilize Section 80C to the maximum limit

Some of the best investment options for a salaried person are under section 80C. The good news is that you may claim a maximum of INR 1.5 lakh under this section. You may choose to invest in all or either some of the below-mentioned investment vehicles.

  • Employee Provident Fund (EPF) – 12% contribution each by employer and employee
  • Voluntary Provident Fund (VPF) – in case an employee wishes to contribute a higher sum of money
  • Public Provident Fund (PPF) – a long-term investment option offered by the Government of India
  • National Savings Certificate (NSC) – a saving scheme by the postal department
  • 5-Year Post Office Time Deposit – offered by the Indian Post Offices
  • Repayment of principal for home loan
  • Registration expenses and stamp duty charges for house property
  • Equity-Linked Savings Scheme (ELSS) – an open-ended mutual fund scheme
  • Unit-Linked Insurance Plan (ULIP) – a dual benefit of insurance and investment

Besides the aforementioned 80C deductions, you may claim benefits through the Sukanya Samriddhi Scheme, Senior Citizens Savings Scheme (SCSS), infrastructure bonds, and National Bank for Agriculture and Rural Development Rural (NABARD) Bonds, among many others.

Save Tax Now

Buy health insurance

Another option for tax saving for salaried employees is the purchase of medical insurance. For a single financial year, you may claim up to INR 25,000 for mediclaim premiums paid for self, spouse, or dependent children. In case you or your spouse is above 60 years of age, the limit is extended to INR 30,000. You may avail of an additional deduction of INR 25,000 on health insurance premiums paid for your parents. In case either of them is a senior citizen, the maximum limit is pushed up to INR 30,000. You may, therefore, enjoy a maximum deduction of INR 60,000 on premiums paid towards health insurance plans.

If you are a salaried employee, you may consider the aforementioned tips. Doing so will not only reduce your tax liability considerably but also will aid in sound financial planning.

Read Here for More Related Articles:

Calculate Premium

Download Brochure


  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999


Download Brochure


  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490


- A Consumer Education Initiative series by Kotak Life

Similar Articles

All about TDS on Salary under Section 192 – Kotak Life

What Is Advance Tax and How Is It Calculated?

इनकम टैक्स रिटर्न कैसे फाइल करें?

Problems People Face with Tax Returns after a Job Change

How to File Income Tax Return - Everything You Need to Know

Tax Saving for Self Employed in India

What is ITR & How to File Income Tax Return?

Saving Income tax in 2017 - 18

Why January Is an Important Month for Saving Tax?

E-Filing of Income Tax Returns in India

What is a savings plan?

Home Investment Plan to Buy Dream Home

Money Saving Tips for Single Women

All you need to know About Tax on Inheritance

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

Section 16 of the Income Tax Act (ITA), 1961

How To Save Tax Using Life Insurance?

What is Form 26AS - All You Need To Know

धारा 80सी आयकर अधिनियम, 1961

What is Section 80C Deduction Limit?

TDS Due Dates of FY 2022-23 For Return Filing

Have You Considered Term Insurance a Part of Your Tax Planning?

How Should I Allocate A Monthly Savings Plan For Long-Term Benefits?

What is Rule 132 of Income Tax? How Does it Affect You?

Why is Form 16 Important?

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

Do Beneficiaries Pay Taxes on Life Insurance?

How to File Income Tax Return without Form 16

What is Tax Deduction at Source (TDS)?

Income-Tax Liability- The Difference Between Gross Income & Total Income in Calculating Income Tax

Income Tax Deduction Under Section 80CCC In India

भारत में महिलाओं के लिए सरकारी योजना

Section 80E: Tax Exemption on Interest on Education Loan

How to Check Income Tax Refund Status Online in India

Income Tax Filing Using Multiple Form 16

How to Boost Your Savings with Guaranteed Results

Can You Get Term Insurance Without Income Proof?

How to View 26AS and Download Form 26AS Online

What is Section 80CCC of the Income Tax Act 1961

What is Section 80C Deduction?

Top 8 Tax-Saving Methods in India- Budget Planning

How to File Form 16 for Salaried Employees?

What is Salary Protection Insurance and Why You Need It

What Investment Options Come with Tax Incentives?

Understanding Tax Exemptions in ULIP (Old and New)

ITR-6: Guide to filing ITR-6 Form online

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

A Comprehensive Guide to Understand the ITR 7 Form

Why Tax Planning Should Be an All-year Round Activity

Importance of Savings Plan You Need to Know

How to e file ITR on Income Tax Government Portal

Is PF Withdrawal Taxable for NRI?

आयकर रिटर्न (आईटीआर) फॉर्म के प्रकार

धारा 80डी आयकर अधिनियम, 1961

What is the TDS Rate on Salary?

Tax Saving Options other than Section 80C

8 Things to Help You Select a Savings Investment plan

How to View 26AS and Download Form 26AS Online?

Income Tax Exemption for Disabled

Guide for Tax Calculation on your Salary

How Much Money This Budget 2019 Can Help You Save

Tax Benefits for Startups in India

Tax Benefit of Investing in Term Plan

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

Penalty For Late Filing TDS Return

List of Important Income Tax FAQs

Things to Do After Filing Income Tax Returns

What is Section 10D of the Income Tax Act?

How to Check Income Tax Returns Status Onine?

All You Need to Know About Section 80C

How to Save Income Tax with Insurance

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

What is ITR 5 Form and How to File ITR 5?

What is TDS Refund Process?

How to create wealth through a savings plan?

A Complete Guide for Filing ITR 3 Form

What are the Different Types of Taxes in India?

What are Deferred Savings Plans?

Save Income Tax by 31st March: Here Is a Checklist

What is indirect tax and its types?

How to File Income Tax Return for First Time Tax Payers

Tax Saving Guide for 2019-20

Tax Saving Options for Salaried Employees

Presumptive Taxation for Business and Profession

What is Tax Evasion and What Are The Penalties For Tax Evasion In India?

ITR 1: Sahaj Form

How To Save Tax Better with 80C

Interest Imposed Under Sections 234A, 234B and 234C

Tax Planning and Tax Benefits of Life Insurance

How to File Form 10E for Tax Relief on Salary Arrears?

How to Pay Advance Tax Online in India

How can NRIs prevent double taxation in India?

Income Tax Benefits for Doctors

Income Tax Deductions for Disabled Persons Under Section 80U

Easy ways to make personal savings plans

What is TDS Exemption Limit?

What is TDS Slab?

Post Office Savings Scheme - All You Need to Know

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

What is the Maximum Maturity Benefit in Assured Savings Plans?

What is the Percentage of Tax Deducted at Source (TDS)?

3 Tips to Buy Guaranteed Savings Plan

What is the Difference Direct Tax and Indirect Tax

What is capital gains tax, and how it works?

All You Need To Know About Assured Savings Plan

Types of Income Tax Return (ITR) Forms

TDS rules on the sale of jointly owned property

Financial Benefits and Government Schemes Every Woman in India Should Know

Tax-Savings Investments and Options in India

Section 80G of the Income Tax Act

Are Financial Planning and Tax Planning the Same Thing?

Tax Benefits of ULIP Plans Available for NRIs

How to create a savings plan and make good investment choices

Difference Between Guaranteed Savings Plan and Guaranteed Income Plan

How to Check Income Tax Refund Status Online in India

What is EEE in income tax? 5 tax-free investment options to become crorepat

आयकर स्लैब 2021-2022

Section 44AD of Income Tax Act for AY 2021-22

How to File TDS Return?

What are Direct Taxes? How to Avoid being Overtaxed?

सुकन्या समृद्धि योजना (SSY) के कर लाभ क्या हैं?

What is HRA (House Rent Allowance) and How is HRA Exemption Calculated?

Saving Plans to Give Children a Debt-free College Education

Tax Season is Coming- Know How to Save Tax

What is the Difference between Assessment Year (AY) and Financial Year (FY)?

All about TDS Payment Online & Due Dates

Personal Finance - Meaning, Importance, and Tips for Personal Finance

How much gold can you keep at home? Limits and income tax rules explained

Highlights of the Union Budget 2023-24

Plan your Daughter's Wedding With Best Monthly Savings Plan

Tax-Free Income in India

Challan 280 - How to Use Challan 280 to Pay Income Tax

Financial Planning and Best investment options for Housewives

Guaranteed Return Plans-Why is it a must for you?

How to Download Form 16?

Who Should Invest In Savings Plan

What To Do If Your TDS Is Not Deposited With The Government?

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

Tips to plan your savings in 2022

Should you prefer a Guaranteed Savings plan over monthly income schemes?

9 Unusual Investments you Didn't Know for Saving Taxes in India

5 Popular Tax-Saving Schemes in India

Tax Deductions You MUST Know

Insurance and Endowment: Everything You Need to Know!

What is Form 16A?

What is Section 80C - Explained in Detail

How can I get Form 16B from traces?

What is the difference between TDS and TCS?

Best Savings plan for the middle class in India

Sub-sections Under Section 80C of the Income Tax Act, 1961

Excess TDS Deduction – Claim TDS Refund

How to Save Tax on Salary Arrears?

Income Tax Deductions Under Section 80C

9 Income Tax Myths That Could Cost You Money while Filing returns

Income Tax Filing For NRI in India

Types of Riders in Insurance Policy

प्रत्यक्ष कर और अप्रत्यक्ष कर में क्या अंतर है?

Investing Lump Sum Amount

12 Tax Changes in Budget 2022 that May Impact Your Personal Financial Planning

How Inflation Affects Savings and Investment?

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

How to File ITR Online

Income Tax Exemption for Physically Handicapped Dependent

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

Tax Saving Tips: Best Ways to Save Income Tax for 2021

When Should TDS be Deducted and Who is Liable to Deduct it?

What is the Difference between Form 16 and Form 16A?

What is Form 16B?

Difference between Section 80C, 80CCC, 80CCD & 80D

Tax Exemption and Scope of Coverage

Impact of GST on Life Insurance in India

How to Calculate returns on an assured savings plan?

Should one prefer a guaranteed savings plan over monthly income schemes?

How to Get Form 16?

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

Difference Between Guaranteed and Assured Returns

Basics of Guaranteed Savings Plan

How to file Form 16 online?

Section 80C Deductions as per Income Tax Act, 1961

How to e-Verify your Income Tax Return

How To Invest In Guaranteed Return Plans For Higher Returns And Financial Security?

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2021-22 & 2022-23

Tax Structure in India

How Do Assured Savings Plans Work and Why You Should Consider One?

Budget 2019: Impact on the Common Man in India

Pradhan Mantri Suraksha Bima Yojana

ITR 2 Form – Complete Guide