Salary Restructuring to Save Tax

Salary Restructuring is a lesser known domain of tax planning. You can structure or restructure your salary so as to reduce the tax outgo by including exempt allowances and reimbursements. Instead of going for a high basic salary you can take reimbursements and allowances which are exempt from tax.But note that your EPF, Gratuity and Superannuation are all a percentage of your Basic, so by reducing your Basic to allow for higher allowances and reimbursements, you will also be reducing your EPF, Gratuity and Superannuation. And note that EPF is exempt from tax, gratuity is exempt from tax up to Rs. 10 lakhs in your lifetime, and the commuted pension portion of Superannuation is non taxable.
Use Medical, Transport Allowance, Education Allowance, Food Coupons to Save Tax. Brief of each is given below for better understanding:
Medical Reimbursement:
The reimbursement of the medical expenses of you and/or your family members is exempt from tax to the extent of Rs.15,000 for the year. You should have bills for the amount claimed, for the relevant year.
Transport Allowance :
Transport allowance provided to you as an employee for commuting between your residence and your place of work is exempt up to Rs. 800 per month (i.e. Rs. 9,600 p.a.).
Education Allowances:
For those salaried employees who have children, education allowance of Rs. 100 per month per child for up to 2 children is exempted (i.e. Rs. 2400 p.a. totally). In case your children are in hostel, the exemption available is Rs.300 per month per child for up to 2 children.
Food Coupons :
Expenses incurred by your employer on provision of free/ subsidized meals to you during office hours at office or business premises, i.e. food coupons, are not taxable as a perquisite, only to the extent of Rs.50 per meal. The exemption is also available in case paid vouchers, which are non-transferable and usable only at eating joints, are provided to employees.
§ 'Free meals' means 'free food and non-alcoholic beverages'
§ There is no tax on tea or snacks during working hours;
§ Where free food and non-alcoholic beverages during working hours are provided in a remote area or an off shore installation, it is not taxable regardless of the value The exemption of Rs.50 per meal is available only in respect of meals during office hours.