How to make extra income while working full time even without a pay hike

May 09, 2018, 11:30 AM IST

Who doesn't want to earn extra money? But with a full-time job at hand, taking time out for extra income is not easy. And if you are not getting any pay hikes, the financial problems get worse. This is why passive income is the way to go. For that, you need to make a balance between your expenses and income to maximise your savings. So, here we explain how to make extra income while working full time even without a pay hike:


Invest money in right instruments: Start by investing in a recurring or fixed deposit.


Gradually move on to investing in mutual funds. For a short-term goal, park your money in a debt funds, and opt for equity funds for a long-term goal. For the medium term, choose a mix of debt and equity funds.


Tax-saving investments offer an investment option, and also reduce your taxable income. Some of the options are PPF, NPS, five-year tax-saving fixed deposits, ELSS, ULIPs, life insurance, etc. All help you save on income tax under section 80C of the Income-tax Act. 


Negotiate with your employer for a tax-friendly salary structure. Items in the salary that can be restructured include Employee Provident Fund, House Rent Allowance, Leave Travel Allowance and Children’s Education Allowance.


Try holding on to equity investments for a year that will result in gains being taxed at 10% instead of 15% — with an added bonus of the first Rs 1 lakh in gains being completely tax-free. You thereby, save on capital gains.