While negotiating for a tax efficient pay package with a prospective employer, you have the limited options of seeking HRA, medical allowance, conveyance allowance and leave travel allowance. Here's how to go about it.

Edited highlights

0:30 Is there a smart way of negotiating a tax efficient pay package?

0:55 Can you negotiate a tax-efficient pay package with a new employer?

1:54 For salaried tax payers, the system is that you earn, pay tax and then spend

2:03 For those who run businesses, the system of taxes is that you earn, you spend and then pay taxes

2:11 It is very important for a salaried person to do tax planning right at the start of the financial year

2:18 This is also because the salaried person doesn't have much to plan

2:26 There are only 3-4 allowances one can play with

2:38 One can put House Rent Allowance (HRA) according to the rent one is paying

2:54 Much depends on whether you are staying in a rented accomodation or your own accommodation

3:09 If you fix HRA well, you get an adequate tax deduction

3:12 There is a meagre annual deduction of Rs 15,000 for medical allowance

3:30 You can ask your employer to separately mention a conveyance allowance of up to Rs 1,600 a month

3:53 Leave Travel Concession (LTC) or Leave Travel Allowance can be part of your pay. It is given twice in a block of four years

4:16 You can anticipate the holiday expenses for you and your family and then suggest the amount as LTC to the future employer

4:26 That's just about all salaried people can do to save taxes

4:52 Other allowances like uniform allowance is more tax avoidance than tax planning and are better avoided