Hi! My In-hand salary is around 87 thousands INR. However, from my last 2 salaries (Feb 2021 and Mar 2021) i have received salaries around 45-47 thousands INR. My both payslips show that 45 thousands INR has been deducted from my salary as "income tax". Could you please explain why m i getting taxed so much! What can i do to reduce the tax amount. Will it continue to deduct 45k every month? My CTC is 12 lacs per annum. Note: I had declared my income for the year 2020-21. Have not declared income for the year 2021-22 as my employer hasnt made any communication. Thanks!
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Income tax deduction from salary will be done by the employer as per the income tax rules.
The payer has to deduct an amount of tax based on the rules prescribed by the income tax department. For instance, An employer will estimate the total annual income of an employee and deduct tax on his Income if his Taxable Income exceeds INR 2,50,000. Tax is deducted based on which tax slab you belong to each year.
Salaried individuals, who live in a rented house/apartment, can claim house rent allowance or HRA to lower tax outgo.
Salaried employees can avail exemption for a trip within India under LTA. The exemption is only for the shortest distance on a trip. This allowance can only be claimed for a trip taken with your spouse, children, and parents.
Standard Deduction has been reintroduced in the 2018 budget. This deduction has replaced the conveyance allowance and medical allowance. The employee can now claim a flat Rs. 50,000 (Prior to Budget 2019, it was Rs. 40,000) deduction from the total income, thereby reducing the tax outgo.
In your income tax return, professional tax is allowed as a deduction from your salary income.
Exemption of leave encashment from tax:
It is fully exempt for Central and State government employees. For non-government employees, the least of the following three is exempt.
a. 10 months average salary preceding retirement or resignation (where average salary includes basic and DA and excludes perquisites and allowances)
b. Leave encashment actually received. (this is further subject to a limit of Rs 3,00,000 for retirements after 02.04.1998)
c. Amount equal to salary for the leave earned (where leave earned should not exceed 30 days for every year of service)
The amount chargeable to tax shall be the total leave encashment received minus exemption calculated as above. This is added to your income from salary.
You can contact your auditor for further clarifications in this regard especially for further exemptions other than the ones mentioned above.
Dear sir,
firstly, you need to write this to the income tax department of your area and ask them to reply as to why is such an amount being deducted.
if they do not reply or if the reply is not satisfactory, you may take legal actions against it.
