Question 1

How much tax can I save through salary restructuring?

Accepted Answer

On a Rs 30 lakh CTC, proper structuring with HRA, NPS (14%), LTA, and reimbursements can save Rs 3-5 lakh annually. The key is maximizing tax-exempt components while staying compliant with documentation requirements.

Question 2

What is the maximum NPS employer contribution for tax benefit?

Accepted Answer

Under Section 80CCD(2), employer NPS contribution up to 14% of salary is fully tax-deductible with NO UPPER LIMIT. This is over and above the Rs 1.5 lakh 80C limit, making it the most powerful tax-saving tool for high earners.

Question 3

How is HRA exemption calculated?

Accepted Answer

HRA exemption is the minimum of: (1) Actual HRA received, (2) 50% of basic for metro cities or 40% for non-metro, (3) Rent paid minus 10% of basic salary. Higher rent and metro location maximize the exemption.

Question 4

What documents are needed for salary structure optimization?

Accepted Answer

Key documents include: rent agreement and receipts for HRA, travel bills for LTA claims, mobile/fuel/food bills for reimbursements, NPS PRAN number, and company board resolution approving the structure. Maintain all records for 6 years.

Salary Structure Optimizer - HRA, LTA, NPS

Salary Details

Leave Travel Allowance (LTA)

Tax-Free Reimbursements

Related Calculators

HRA Exemption Calculator

NPS Calculator

Frequently Asked Questions