Income Tax FAQs

FAQ On Salary Deduction

Reach Us
1) What is the standard deduction available on salary?

Employees can claim a standard deduction of Rs 50,000 against income from salary.

2) How can I claim deduction for house rent allowance?
You can claim a tax deduction for HRA against the house rent paid by you for your residence. HRA deduction is available to a salaried individual. You can claim tax deduction on house rent allowance as lower of the below:

    1. Actual house rent allowance received
    2. Rent paid reduced by 10% of salary
    3. 40% of salary in non-metros or 50% of salary in case of Delhi, Kolkata, Mumbai and Chennai
3) What is leave travel allowance and how do I claim deduction for leave travel allowance?

Leave Travel Allowance is a claim for deduction against travel expenses incurred to any place in India. The exemption is only for two trips in a block of four years. Employees can submit the actual bill or air tickets or rail tickets to claim LTA exemption. The current block of LTA is calendar years 2018-2021.

4) Can I claim exemption for flexi pay components of my salary?
An employee can claim exemption for flexi pay components based on the actual expenditure incurred. Some flexi pay components are:

    1. Broadband/internet and phone
    2. Meal coupons or Sodexo card
    3. Books and periodicals
    4. Gift from employer
    5. Vehicle running and maintenance

Do note that the deduction for flexi pay components will depend on your salary components. For example, your employer provides an allowance of Rs 2,000 per month towards broadband/internet. You can incur and claim a maximum of Rs 2,000 per month.

5) Can I claim tax exemption for relocation allowance?

You can claim exemption for relocation allowance to the extent of actual expenditure incurred for relocation. Relocation expenditure may include cost of travelling and transferring your personal belongings.

6) Can I claim deduction for provident fund contribution deducted from my salary?

The provident fund contribution made by you is eligible for tax deduction under section 80C. The maximum deduction available under section 80C is Rs 1.5 lakh. Do note that section 80C covers various investments such as LIC premium, mutual fund ELSS, PPF contribution among others within the maximum limit of Rs 1.5 lakh.

7) Can I claim deductions for medical insurance and donations against my salary income?

You can submit the medical insurance receipt to your employer to claim deduction against your salary income. Similarly, you can claim deduction for donation by submitting the donation receipts to your employer.

8) Can I claim housing interest deduction against my salary?

You can submit the housing loan certificate to your employer and claim tax deduction for housing loan interest and principal payments.