Vijay is employed with Sunder Ltd., at a monthly salary of ₹45,000. He also receives ₹15,000 per month as house rent allowance. He deposited ₹40,000 in the PPF account. He also pays ₹30,000 as tuition fees of his two chi

Some of the Tax planning measures for Vijay and Isha could be: Vijay holds substantial interest (21%) in Chander Ltd. where Isha holds a post for which she is not adequately qualified. Thus, the remuneration received by Isha would be clubbed in the income of Vijay. To avoid this, Vijay may reduce his shareholding in Chander Ltd. to 19%. Vijay and Isha may request to their respective employers to restructure their salaries, as follows: Restructure salaries to break up the monthly salary into basic pay, conveyance allowance / car facility, leave travel facility, medical reimbursement and telephone reimbursement etc. This will reduce the amount of taxable salary. There are several employees' welfare schemes such as recognised provident fund, approved superannuation fund, gratuity fund. Payments made towards such schemes are eligible for deductions. So, Vijay and Isha may request their employer to include these welfare schemes and make contribution towards same. Currently Isha is treating the house as self occupied by the family; she may rent out this to Vijay against a rent receipt. This will enable Vijay in claiming deduction for House Rent Allowance. Isha may claim the deduction for the principal amount and the interest amount paid for the funds borrowed for construction of house. For principal amount, deduction, could be claimed for upto ₹1,50,000 and for interest amount deduction could be claimed upto ₹2,00,000.