What are the various ways of savings to avoid income tax?

Could some one please suggest how much savings should be done to avoid tax for annual salary of Rs.3,03,600.?

• Annual income is 303600 for the financial year 2009-2010. According to the recent budget, TDS is 16,191.60+ Education cess - Rs.314.40 and Secondary and Higher Education cess Rs.157.60. Total tax payable = 16,663.20. I have got this output from http://financeminister.in/income_tax_calculator_2009_2010.php Please let me know how much should be saved to avoid this tax. Thanks in advance. Kavitha

• Answer:

  All your calculations are wrong. For FY 2009-10, income not subject to tax for woman is Rs. 1,90,000 so the taxable income is Rs. 1,13.600. Income tax is Rs. 11,720 plus education tax of 3%. Total tax is Rs. 12,272. There is no fixed rate on TDS on salary. TDS on salary is deducted bases on projected salary and deductions for the year. Employer must figure out your expected income from the year, your deductions for the year, your expected income tax. For how the TDS on salary is figured out, read http://mytaxes.in/index.php?topic=12.0 With income of about Rs. 3 lac, you can easily plan so that you do not have any taxable income. Get breakup of you salary with basic pay and allowances like conveyance, medical and HRA (if you are paying rent). Many allowances are not taxable. For salary breakup to get maximum deductions, read:Income From Salary http://mytaxes.in/index.php?topic=17.0