Patrick Francis earns a good salary, but more than 8% of his gross income goes in tax. If he rejigs his salary structure and avails of the deductions he is eligible for, his effective tax can come down to about 5.5%. Here's how he can save Rs 36,000 a year in tax.

Save more, restructure your income to cut taxFrancis should ask his employer to reduce the fully taxable special allowance by Rs 61,000. Instead, 10% of his basic pay should be put in the New Pension Scheme (NPS) under Sec 80CCD(2). Another Rs 8,000 should be given as meal coupons. Also, the tax-free transport allowance should be enhanced to the maximum Rs 1,600 a month.

These three steps will cut his tax by Rs 12,600. Francis' senior citizen mother suffers from a neurological disease. Assuming that it is among the diseases specified under Sec 80DDB, he is eligible for a deduction of Rs 60,000.

This will reduce his tax by Rs 12,360. Given that he can invest more, Francis should open an NPS account. If he puts Rs 50,000 in the NPS under Sec 80CCD1b, he can save Rs 10,300. He should also shift from FDs to debt funds to save around Rs 1,000 in tax.