BENGALURU: Salary structure is a balancing art, especially when it comes to making a tax efficient salary structure. High salaries may look lucrative to everyone. It really sounds good to say about such a package to your friends and relatives.

But do you really get the same as written in your offer letter; instead some amount of your salary gets reduced due to some constraints like tax and other deductions. You can evaluate the salary components in order to eliminate the components that are not tax-efficient.

The Economics Times has compiled few tricks to make your payment more tax efficient:

1. Lower Basics: The primary component of the compensation package is the basic salary. If your basic pay is high then it is liable to impose high tax based upon your salary. Your basic pay will depend on you and your family’s need.

So, it’s wise to opt for a lower basic pay and variable pays. If you are planning for your retirement benefits, then you can have a higher basic pay as it will let you contribute to the provident fund or Provident Fund (PF). PF is a term generally used to refer to pension fund where we make contributions for retirement or pension.

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