In layman terms, Leave Encashment means to avail salary in lieu of accumulated leaves. In any organization, Leave Encashment is one of the major incentives for employees not to avail leaves :). I was one such employee who believed in the accumulation of leaves. In all my previous organizations, i accumulated at least 80% to 90% of the total leave eligibility. Normally the Leave Encashment policy of the organization allows you to encash the leave at basic salary. If your salary structure is tax friendly i.e. fully loaded with perquisites and allowances. In such cases, basic salary is less than ... Read More
Voluntary Provident Fund
Voluntary Provident Fund or VPF is most useful yet most neglected tax saving option. Financial Planners or Relationship Managers will not suggest this as there are no commissions, no targets and no incentives. This option is available only to salaried individuals who are member of EPF or Employee Provident Fund. Every month, 12% of basic salary is compulsory deduction towards contribution to EPF. Ref to EPF contribution, not many people are aware that EPF is eligible for dedcution u/s 80C and is part of overall capping of Rs 1.5 lakh u/s 80C. For example, if you are contributing Rs 50,000 ... Read More