Salaried employees also play a major role in paying taxes. The allowances and deductions provided to salaried individuals under income tax rules are dependent on various factors, including the types earnings, their filing status.
In this Blog we will talk about Income Tax Allowances and Deductions for Salaried Employee.

1. House Rent Allowance (HRA):
   • Purpose: HRA provides relief to employees who live in rented accommodations.
   • Exemption Criteria:
     • Keep rent receipts and evidence of rent payments.
     • Calculate the least of the following:
       • Total HRA received from your employer.
       • Rent paid minus 10% of basic salary + DA.
       • 40% of salary (Basic salary + DA) for non-metros or 50% for metros.
   • Note: If rent payment exceeds ₹1 lakh annually, provide the PAN details of the house owner.
2. Standard Deduction:
   • For FY 2023-24, both old and new tax regimes allow a standard deduction of ₹50,000.
   • This deduction reduces your taxable income directly.
3. Leave Travel Allowance (LTA) or Leave Travel Concession (LTC):
   • LTA/LTC exempts travel expenses incurred during leaves.
   • Restrictions:
     • Covers domestic travel only (not international).
     • Modes: railway, air travel, or public transport via the shortest route to the destination.
   • You can claim LTA/LTC twice in a block of four years.

Remember, understanding these allowances and deductions empowers you to optimize your tax planning. Consult a tax professional for personalized advice. If you have more questions, feel free to ask!