How NPS Investment Can Reduce Your Tax Outgo?

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It's the much coveted desire of every employed person to take a larger sum home and cut on tax as far as possible. But remember it should not be against the allowed provisions as then ready to face strict counter action as taxmen has already tightened its vigil over defaulting individuals and entities.

How NPS Investment Can Reduce Your Tax Outgo?

Other than the usual tax-free perks or reimbursements that include a maximum of Rs. 1600 for a month on conveyance, Rs. 100 towards education allowance per child for a maximum of two children with hostel and other amenities Rs. 300. For other daily expenses, employee may ask for reimbursements to reduce his or her total tax outgo.

In addition to it, National Pension Scheme investment if contributed towards by the employer to a maximum of 10% of the basic pay is tax exempt. Further, if you invest an amount equivalent to Rs. 50000 in the retirement scheme over and above the maximum investment amount allowed u/s 80C of Rs. 1.5 lakh, you can avail a deduction in its respect.

So, other than with a retirement fund added to your portfolio by opting for the NPS scheme, you also are able to increase your take home salary, by reducing your tax outgo.
Other investments such as health insurance policy for securing your and your near and dear one's health also allow you to reduce your tax liability as the amount paid as premium is available for deduction u/s 80D.

Goodreturns.in

Read more about: tax, nps, health insurance, epf
Story first published: Friday, October 13, 2017, 9:30 [IST]
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