Kumar should also ask his company for the NPS benefit. Under Sec 80CCD(2), up to 10% of the basic salary put in NPS is tax-free. If his company puts Rs.5,375 (10% of his basic pay) in NPS every month, his tax will reduce by around Rs.14,000. Another Rs.10,400 can be saved if he invests Rs.50,000 in NPS on his own. Given that he also works from home, Kumar should ask his company for a higher telephone allowance. He should also ask for some common taxfree perks such as meal coupons and LTA. If he gets Rs.22,500 worth of meal coupons, a newspaper allowance of Rs.1,000 per month and LTA of Rs.50,000, his annual tax will reduce by roughly Rs.18,000.
Kumar should also buy a health cover for his parents. A health insurance premium of Rs.25,000 per year will save him around Rs.5,200 in tax.
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