Next, Desai should ask his company for some basic tax free perks, such as newspaper bill reimbursements and meal coupons. If he gets Rs.24,000 worth of meal coupons and a newspaper allowance of Rs.2,000 per month, his annual tax will reduce by Rs.15,000. Big savings will come if his company also offers him a gadget allowance. Under Section 17(2), gadgets and appliances 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.2.4 lakh a year (Rs.20,000 per month), his tax will come down by around Rs.75,000.Desai also needs to review his investments. Early withdrawals from debt funds have led to short-term capital gains which are taxed at the slab rate. He should remain invested for longer periods to reduce the tax.
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