Budget 2025 Alert: These 8 Salary Perks Can Help You Save Income Tax Up to Rs. 1.35 Lakh
The Budget 2025 brings good news for taxpayers, who are earning up to Rs. 12 lakh per year. With the Rs. 75,000 standard deduction, anyone earning up to Rs. 12.75 lakh annually (Rs. 1.06 lakh per month) will not have to pay any income tax under the new tax regime.
Currently, out of 8.75 crore individual taxpayers, about 6.3 crore have already switched to the new regime. Since it offers lower taxes, another 1 crore taxpayers are expected to join next year.
The Budget proposals have changed how taxpayers see the new tax regime. Some experts even say that the old tax regime is no longer useful. But it is not true, while the new tax regime seems attractive, you can still lower your tax under the old regime by structuring your salary smartly with tax-saving perks. Besides the usual House Rent Allowance (HRA), you can save more on taxes by smartly structuring your salary package.
Everyone has different financial needs. Some people spend money on travelling, while others prefer spending on gadgets or learning new skills. A Flexible Benefits Plan lets employees customize their salary by choosing perks that fit their spending habits and financial goals. A well-planned flexi benefit plan can increase loyalty and decrease turnover rates.
A well-planned flexible benefits package can help keep employees happy and loyal, reducing the chances of them leaving. This saves companies money on hiring and training new staff, creating a more stable and engaged workforce.
Many companies are not offering all the tax benefits that employees are eligible for under the law. With the new tax regime now being the present choice, there is little effort to educate employees about tax-saving opportunities. As a result, employees end up paying higher taxes due to their employers’ lack of awareness and inaction.
Here are some tax-saving perks that can help you save tax under the old tax regime:
These 8 salary components can help you save over Rs. 1.35 lakh in taxes.
- Fuel and Travel Expenses
- Leave Travel Allowance
- Driver Salary
- Moveable Assets
- Telecom
- Newspapers
- Learning and Fitness
- Meal Coupons
1. Fuel and Travel Expenses
If you use your own vehicle or a company-provided one for official work, you can get fuel and maintenance costs reimbursed. However, if you also use the vehicle for personal purposes, a part of this benefit is taxable at Rs. 2,700 for cars with engines smaller than 1.6 liters and Rs. 3,300 for bigger cars.
2. Leave Travel Allowance
If you include Leave Travel Allowance (LTA) in your CTC at the start of the year, you can get tax-free reimbursement for your family’s travel expenses during vacations. This benefit can be claimed twice in a block of four years. However, you cannot add LTA later in the year or claim it while filing your tax return.
3. Driver Salary
Senior executives have the option to hire a driver. The tax on the driver’s salary is only Rs. 900 per month, but this small amount can help save a significant portion of your taxes.
4. Moveable Assets
You can save big on taxes if your company buys gadgets or appliances for you. Under Section 17(2), if your employer purchases items like mobile phones or home appliances in the company’s name and gives them to you for personal use, you are taxed on only 10% of their value. If the company provides a computer or laptop, there is no tax at all.
5. Telecom
These expenses are tax-free for employees if they provide actual bills for reimbursement.
6. Newspaper
Newspaper and magazine bill reimbursements are also tax-free, but you must submit the bills as proof.
7. Meal Coupons
You can get a tax-free benefit of up to Rs. 50 per meal, which adds up to around Rs. 2,200 per month. Although this perk has been available for years, it wasn’t widely used. However, with the rise of digital wallets, it has become much easier for employees to take advantage of them without needing to keep meal receipts.
8. Learning And Fitness
Some companies cover the cost of gym memberships or online and offline courses that help employees improve their skills. These perks are tax-free, but employees must use them and provide proper documents as proof.
