There are a few Tax exemptions allowed for Salaried employees. I am listing out the most important of such exemptions that can be claimed by the salaried class.
Many employees are given House Rent Allowance(HRA). A part of this amount is exempted from income tax as Tax is levied on some part itself. It can be easily claimed. The amount of exemption is also quite high.
Exemption on Leave Travel Allowance
Many employers give allowances to their employees to go on vacation with their families. This amount is exempted to a certain limit. It has a condition that the allowance is given for vacation only in India. Amount can only be claimed if the employee actually goes on vacation as you would need to submit the bills.
Exemption on Leave Encashment
In case you don't avail the leave provided to you, certain employees give you an option to encashing them. Such amount is also entitled to tax exemption to some extent.
Exemption from Pension Income
There are two types of pensions - commuted and uncommuted. Commuted pension is given in lump sum whereas uncommuted pension is given installments in regular intervals. In either type of pension, the tax exemption is allowed to certain extent.
Exemption For Gratuity
Gratuity is the gift provided by the employer for the past years of service. This gratuity can either be received by the employee at the time of retirement, or by the legal heir in case of death of the employee.
Exemption on VRS
Some employees opt for voluntary retirement before the actual retirement age. Such employees receive some money from the employee depending on their service left. This amount is exempted under section 10(10C).
Exemption on perks
Some high end employees receive perks/facilities like vehicle or mobile phones. This amount is not entirely tax free, but a specific value of this amount is exempted from payment of tax.
Exemption on various allowancesSome employees get allowances like children's education, transport allowance etc. A portion of such amount can be claimed for exemption.
To get the exact amount that can be claimed under the above income, you need to consult a tax consultant who can guide you to work out a better exemption based on your income categories.
Live....and Let Live!