Teja has a Rs 75 lakh term plan though he has no dependants or liabilities yet. Harshinder, on the other hand, has not bought any cover. Health insurance The broader categorisation includes the basic indemnity plan, which covers hospitalisation expenses, for an individual, and the family floater plan, which includes your entire family in a single cover.
So if your company insures you for Rs 2 lakh, buy an independent top-up plan for Rs 3 lakh as it will be cheaper than a regular policy. Look at the claim settlement ratio, hospital network, inclusions and benefits before buying a plan. It is available both as a standalone policy or as an add-on with life and health insurance.
Typically a standalone plan will offer a higher cover and more flexibility. You can avoid buying it at this stage, but consider it in your 30s given the higher incidence of such diseases at lower ages. Accident disability plans This is a plan you should buy when you start working because of the sheer unpredictability of life. It covers you against mishaps that can result in complete or temporary loss of income due to partial or total disability. Buy a cover for Rs lakh or one in accordance with your income and nature of job.
Home contents plan Though you are unlikely to have a house at this stage, buy a policy for the contents if you are in another city, not with your parents. The premium for a Rs 5 lakh cover can be Rs 3, and will cover jewellery, home appliances, furniture, etc, against theft, fire and natural disasters. Do you know which cover you need? This is something beyond your control. What is in your hands is making the most of what the company is offering you.
However, these too are not written in stone. Moreover, what constitutes the CTC will vary from company to company. All CTC structures include three main components—basic, retiral benefits, allowances and reimbursements. Other components vary. Also, benefits given in kind, for in-wages. This means that except stance, house, furniture and car, are sometimes part of the total pay. Some companies even include premium paid for group benefits such as health and accident insurance in your CTC. You need to make sure that you are not losing out because of lazy salary structuring by some HR personnel.
So customise your CTC according to your needs. Restructure the basic pay The basic, probably the chunk of your salary, includes basic pay, HRA and often dearness DA and special allowance.
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Apart from HRA, every component is fully taxable. An easy way to reduce tax liability is to cut basic pay and adjust it as perks or long-term benefits. If you have a special allowance component, adjust it as a tax-free component. However, you need to weigh the pros and cons before tinkering with your basic. Also, if you want to apply for, say, a car or home loan in the short term, you may not want the basic pay to be too low. The DA will be taxable and the PF contributions are tax-free, but it will reduce your take-home salary.
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On the other hand, reducing the basic pay will mean a lower contribution towards retiral benefits, which may not be good in the long run. Also, if you live in a rented house, recalculate your tax benefits on HRA before lowering the basic. Choose one of the following two ways to restructure the salary with maximum tax benefits. Increase in-hand salary Benefits such as leave travel allowance LTA , medical and conveyance allowances serve two purposes. One, they increase the net takehome salary. Two, they make the salary structure more tax-efficient.
However, the limitation is that there are caps on most of these perks. For instance, you can claim up to a maximum of Rs 15, every year for medical reimbursements, Rs 26, for food coupons, Rs 5, as annual gifts and Rs 19, as travel allowance on a yearly basis. Also, keep in mind that you will have to produce original bills and receipts to claim some of these expenses. So, make sure they are within the claimable limit. Take advantage of perquisites if you are planning to buy a car or join a professional course while working. Rather than taking a loan, if your employer funds the expense and includes it as a part of your CTC, your tax outgo can reduce significantly.
This is because you are taxed only on the perk value. For instance, if you plan to buy a Rs 6 lakh car on loan, you will have to pay roughly a monthly EMI of Rs 13, for five years, which will be a post-tax expense. The tax outgo over five years on Rs 7.
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However, if the company shows it as a perk, you are taxed only for the perk value of the car, which is between Rs 1, a month for cars of up to cc and Rs 2, a month for cars bigger than cc. But when you quit, you may request the company to allow you to buy the vehicle at depreciated cost. This rule holds true for other big ticket expenses like laptop, gadgets, except in case of rented accomodation.
Optimise long-term savings If you want to keep your basic intact but do not mind a slightly lesser take- home pay, reduce your allowance and increase your retiral benefits to reduce your tax liability.
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However, you can increase yours using the voluntary provident fund VPF route. Your EPF contributions can be withdrawn without any tax implication after five years of service. If tax liability is not nil after exhausting the Section 80C investment limit of Rs 1. NPS, however, does not enjoy as high a liquidity as PF.
Withdrawal is only allowed at retirement or under special circumstances. Not all long-term benefits are tax-efficient, and you may want to get rid of a few as well.
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For instance, gratuity, another common long-term benefit is tax-free up to 15 days of basic pay or Rs 10 lakh, whichever is lesser. However, it is payable only after five years of service. So, it is redundant if you do not plan to stick around for so long. Although not a very big component, you should try and adjust the money under some other head. Tax and tweaks A quick checklist of tax rules for major components and how to tweak them to get maximum benefits. Prepaying in the earlier years is a tax-efficient strategy as well, when the interest component is higher.
This is because there is no cap on how much you can claim under Section 80E. However, you have a time limit of eight years to claim this benefit. Another benefit that people living with family miss on is HRA. Even if you are living with parents, you can claim a deduction for house rent, provided your parents own the house. So, if you pay Rs 12, a month, your parents will have to pay tax on only Rs 1 lakh. Even if this earning is above the the basic Rs 2.
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Then: 1. So, you pay tax on Rs 2, Here, the tax liability is even higher. You pay tax on Rs 4, If HRA 4. Ships in 7 to 10 business days. Link Either by signing into your account or linking your membership details before your order is placed. Description Product Details Click on the cover image above to read some pages of this book!
In Stock. Australian Residential Property Development for Investors. Engines of Wealth Commercial Retail Shops. Mastering the Australian Housing Market. Buying Property for Dummies 2nd Australian Edition. View Wishlist. When you buy a home, upon completion. The bonus is usually paid to your conveyancer.
When can it be used to buy a home?
www.aristocrat-club.ru/modules/2702.php This can be done in three months if the maximum deposits are made. You have to have had the lifetime Isa for at least a year. Who can open it?
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