2. Allowances: Generally, allowances are fixed. It needs to be paid every month. You can choose tax friendly allowances and reimbursement instead of going for a high basic pay. The major types of allowances are House Rent Agency (HRA), education allowances, and conveyance allowances.

You can make all these allowances tax free by submitting your bills as evidence of the expenses. You can get a lot of relaxation on tax expenditures based on your allowances offered.

3. Prerequisites: Prerequisites usually involve discounted tax costs. If your company is providing a car for you, both for personal and official purpose, it is wise to accept this offer. Instead of buying your own car and feeling burdened with EMI, you will be rather benefited.

The taxable cost associated with the personal use is similar to the cost of a driver that you would like to hire for driving your car. It helps in saving a lot of tax.

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