Next, Desai should ask his company to offer some tax free perks. If he gets an LTA of Rs.72,000, his tax will come down by roughly Rs.22,500. He should also ask for a gadget allowance under Section 17(2). Gadgets bought in the name of the company and given to the employee for personal use are taxed at only 10% of the value. If Desai gets Rs.48,000 a year (Rs.4,000 per month), his annual tax will reduce by around Rs.15,000. Some other basic tax-free components such as a newspaper allowance and food coupons can reduce the tax further. If he gets Rs.1,000 per month for newspaper and periodicals, his annual tax will reduce by around Rs.3,750. Meal coupons worth Rs.22,000 will bring down his tax by another Rs.7,000.
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