No More Tax Savings on Petrol, Mobile, Taxi, or Gym Bills – Here’s What You Need to Know

New Delhi (The Uttam Hindu): If you were relieved by the decision to make an annual salary of ₹12 lakh tax-free, this news might come as a shock. The government is now considering a significant change in tax rules for salaried employees, which could directly affect your take-home pay.

Finance Minister Nirmala Sitharaman has proposed modifying the definition of salary, perks and benefits in the Budget for FY 2025. In simple terms, Part-B of your salary package, which includes various tax-free perks, may soon be eliminated. While no official announcement has been made yet, this proposal is expected to be included in the Income Tax Bill that will be presented in Parliament next week.

Current Perks That Are Tax-Free

At present, perks worth up to ₹50,000 are excluded from taxable income. Some of these tax-free benefits include:

- Company-provided benefits such as laptops, Sodexo meal cards, subsidized food, accommodation and medical facilities

- Travel perks like free company cars, taxi reimbursements and travel allowances

- Work-related reimbursements such as mobile bills, entertainment allowances and club memberships

- Provident Fund (PF) contributions and free medical treatments

What Might Change?

The Finance Minister has proposed removing these tax exemptions, meaning benefits such as mobile bill reimbursements, gym memberships and petrol allowances could now be counted as part of taxable salary. If these changes come into effect, your taxable income will increase and you may end up paying more in taxes.

A Silver Lining for Salaried Employees

While these tax benefits may be removed, the government has provided some relief to the salaried class. Under the new tax regime, income up to ₹12 lakh has been made completely tax-free. Additionally, with the ₹75,000 standard deduction, individuals earning ₹12.75 lakh will effectively pay zero tax. This move has brought significant relief to employees across different income levels, from junior staff to top executives.