Salary Restructing & Tax Optimisation
How Restructing Salary Can Optimise tax ?! Maximize Tax Savings: Restructuring Statutory Contributions for Bigger Deductions Tax season is upon us, and every taxpayer wants to minimize their tax liability. This year, consider a strategic move that can significantly boost your tax deductions – restructuring your statutory contributions. Let's explore how shifting a portion of your Provident Fund (PF) contribution to the National Pension Scheme (NPS) under Section 80CCD(2) can unlock additional tax benefits. Understanding Provident Fund and NPS: Provident Fund (PF): A mandatory savings scheme for salaried individuals, where both employer and employee contribute a fixed percentage of your salary (usually 12%). The contributions are tax-deductible under Section 80C, but with a total ceiling of Rs. 1.5 lakhs. National Pension Scheme (NPS): A voluntary pension scheme offering market-linked returns. While employee contributions are deductible un...