My age is 59 years old, and I work as an associate professor in a college. I receive a consolidated pay of Rs 1,00,000. How can I reduce my income tax? Under which section should I request the management to pay my consolidated salary in order to reduce my income tax? Some suggest that changing my designation from Associate Professor to Consultant could be beneficial. Please advise.
From India
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From India
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By changing the designation from Assistant Associate Professor to Consultant, the tax liability will not change. A consultant is one who is consulted for some matters. He will not be available in the office/college throughout the day, week, or month. He will not follow the office timing nor the HR policies relating to leaves, taking approval from the HoD for leave, dress code, etc. will be applicable to him. I understand that you attend the sessions every day, do evaluation of papers of the students, remain in the college till the sessions end from Monday to Friday from the 1st of the month till the last day. Please go through a case on the same subject attached.
Inclusion of certain components like HRA, conveyance allowance, etc., as part of the salary may reduce your tax burden. But these are subject to other conditions, like if you are residing in an owned house or if your spouse is getting HRA, then you will not get the benefit of HRA. A reasonable amount can be put as reimbursements, like fuel reimbursement, telephone reimbursements, reimbursement of books and periodicals for upskilling, etc. Normally, allowances will be part of salary and thus taxable, but reimbursements will be excluded from the salary head. Similarly, you can also contribute to EPF.
From India, Kannur
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4758Inclusion of certain components like HRA, conveyance allowance, etc., as part of the salary may reduce your tax burden. But these are subject to other conditions, like if you are residing in an owned house or if your spouse is getting HRA, then you will not get the benefit of HRA. A reasonable amount can be put as reimbursements, like fuel reimbursement, telephone reimbursements, reimbursement of books and periodicals for upskilling, etc. Normally, allowances will be part of salary and thus taxable, but reimbursements will be excluded from the salary head. Similarly, you can also contribute to EPF.
From India, Kannur
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Hi,
If you are in receipt of a consolidated salary, then your salary is subject to TDS of 10% only. What else are you expecting?
Probably, you may check with your college regarding the feasibility of reducing your consolidated salary to ₹50,000 and the remaining amount you may request in the form of voucher payment to be adjusted against different heads for accounting purposes. However, unless there is some benefit for the college management, they might not consider it. Also, cash transactions always pose a risk for the college management.
From India, Madras
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If you are in receipt of a consolidated salary, then your salary is subject to TDS of 10% only. What else are you expecting?
Probably, you may check with your college regarding the feasibility of reducing your consolidated salary to ₹50,000 and the remaining amount you may request in the form of voucher payment to be adjusted against different heads for accounting purposes. However, unless there is some benefit for the college management, they might not consider it. Also, cash transactions always pose a risk for the college management.
From India, Madras
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In order to save income tax, I don't think that it is advisable to accept a salary in cash. The college, especially private colleges unaided by government/UGC, will have unaccounted funds from which they can pay remuneration in cash. But if you accept cash, your salary for all purposes, including the computation of gratuity, will become less to the extent of accounted money. Even when you go for a loan from a bank, what they consider as remuneration is the amount reflected in your bank account. In such scenarios, it is always fine if you have a reasonable salary as reflected in the IT returns. Again, the risk of getting remuneration in cash is very high.
From India, Kannur
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From India, Kannur
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9 ways to reduce tax burden.doc