Take home pay is your income after deducting income taxes. In other words, this is the pay you actually get in hand.
There are many ways for reducing taxes and increasing your take home pay.
Under Housing Rent Allowance (HRA), you can claim a tax deduction for any housing rent paid. If you stay with your parents, you can still claim the HRA benefit by showing rent paid to parents.
If you go for a housing loan, you can get tax deductions on both the interest and principal components. Every year, you can get a benefit of up to ₹200,000 on interest payments and up to ₹150,000 on principal repayments.
Leave travel allowance (LTA) can be claimed on travelling expenses incurred, either as an individual or with family. Under LTA, you can get a benefit for up to two trips in a block of 4 years. The amount of LTA available depends on the arrangement with your employer. Note, LTA can be claimed only on domestic travel and not on international travel. Also, you can only claim travel-related expenses and not the expenses related to food or accommodation.
Food vouchers such as Sodexho can increase your take-home pay. Food vouchers are available in different denominations of ₹500, ₹1000, ₹2000, etc. Food vouchers are accepted by most restaurants, food outlets and even shopping malls (for food-related expenses).
Telephone allowance allows you to deduct up to ₹12,000 every year for any expenses incurred on telephone bills. Note you need to show your telephone bills as proof for claiming this benefit.
With medical allowance, you are allowed to claim medical bills of up to ₹15,000 per year, for you and your family. Again, you need to show actual medical bills to claim this benefit.
In addition to the above, you can increase your take-home pay by investing money in the following.
Use our tax calculator to calculate your take home pay.