How to reduce TDS deduction from your salary before 31 March 2024
Before the end of financial year, employer ask for complete details of all the investments made and expenses incurred during the year. The reason your employer ask for all such details is, to calculate the tax amount to be deducted from your salary, known as tax deducted at source.
What is TDS – TAX DEDUCTED AT SOURCE
As per the income tax laws, every employer is required to deduct tax amount from salary of employee if their salary exceed the threshold limit. With regard to same employer asks for “Income tax declaration” with details of investment made and expenses incurred during the year. In case a person doesn’t provide such certificate, employer deduct TDS based on evidences available with them.
How to reduce TDS :
HRA
HRA means house rent allowance, an employee who lives on rent needs to produce rent slips to his employer for calculation of HRA, basically employer needs this amount to calculate HRA deduction from salary. HRA deduction will be available to the least of below
- Actual HRA received from employer
- Actual Rent paid – 10% of salary
- 40% ( non metro ) and 50% ( Metro ) of Basic Salary
Interest On House Property
Interest paid on house loan can reduce your income significantly and as a result reducing your burden of TDS, and for that you need to submit Interest certificate from your bank to your employer.
NPS
Amount invested in New Pension scheme is a allowable deduction and will reduce your TDS, you need to submit investment receipt to your employer.
Life /Medical Insurance
Life insurance under section 80 C and medical insurance under section 80 D, are allowed as deduction from your income and will help in reducing the amount of TDS. For that you need to submit medical insurance premium paid receipt and life insurance premium paid receipt to your employer.
Donations
Donations made to political party or charitable trust are also allowed as deduction and you need to submit receipt of donation to your employer, to reduce the amount of TDS