What is Salary Packaging?
What is Salary Packaging?
Salary Packaging is a way to restructure one’s income. It allows buying items from the pre-tax salary instead of the after -tax salary. This results in greater savings and lesser tax as the taxable income gets reduced. This actually benefits everyone – no matter how much money they make.
What are the popular items to be covered in salary packaging?
The commonly salary packaged items include:
- Vehicles
- Laptops
- Mobile phones
- Computer software
- Briefcase or any approved tool of trade
Does salary sacrificing get covered under salary packaging?
Yes, it does. Whatever you contribute over and above the mandatory contribution (which is 9.5% for the financial year 2014-15) will be excluded from taxable income.
Can Living Away From Home Allowance be salary packaged?
Yes. When you move away for your place of regular residence for work Living Away From Home Allowance (LAFHA) can be availed. If your spouse or children also relocate along with you then their expenses too can be salary packaged. Largely the expenses around rented accommodation and food costs get covered.
Can IPS guide regarding best salary packaging options for me?