a. Basic Salary

This is a fixed component in your pay check and forms the basis of other portions of your salary and hence the name. It is usually a large portion of your total salary. HRA is also defined a percentage of this Basic Salary. Your PF is deducted at 12% of your Basic Salary.

b. House Rent Allowance

Salaried individuals who live in a rented house/apartment can claim House Rent Allowance or HRA to lower taxes. This can be partially or completely exempt from taxes. The allowance is for expenses related to rented accommodation.

If you receive HRA and dont live on rent your HRA shall be fully taxable.

c. Medical Reimbursement

If your company provides you with medical reimbursement of Rs.15,000 towards medical expenses, you must submit bills to your employer to claim this. These expenses could be incurred towards consultation with a doctor, medicines, medical tests etc.

Deductions can also be claimed against medical expenses of your dependents. Please check about this with your company.

Make sure to keep all the bills safely and submit them timely to your employer for reimbursement.

The Rs.15,000 you can claim is for each tax year that starts on April 1 and ends on March 31 next year.

d. Conveyance Allowance

Conveyance allowance is given to employees to meet travel expenses from residence to work. The conveyance allowance for up to Rs.19,200 per annum is exempt from tax.

e. Leave Travel Allowance

Salaried employees can avail exemption for a trip within India under Leave Travel Allowance. The exemption is only for shortest distance on a trip.

This allowance can only be claimed for a trip taken with your spouse, children and parents, but not with other relatives.

This particular exemption is up to the actual expenses, therefore unless you actually take the trip and incur these expenses, you cannot claim it. Submit the bills to your employer to claim this exemption.

f. Special Allowance

Any number in your salary by the name of 'special allowance' is fully taxable. This is usually the left over component of your salary, after allocating to Basic, HRA, LTA, Transport Allowance etc.

g. Employee Contribution to PF

Both employer and employee contribute a 12% equivalent of the employee's basic salary every month toward employee's pension and provident fund. An interest of about 8.5% gets accrued on it. This is a retirement benefit that companies with over 20 employees must provide.