On which amount we calculate the basic. Is it the CTC amount or the gross CTC amount ? Ranjeet Kumar ranjeet_kumar393@yahoomail.com
From India, Mumbai
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Mahr
505

Dear Ranjeet, The basic is normally calculated on to the gross salary. Do search this forum as the same topic has been discussed lot of times here.
From India, Bangalore
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  • CA
    CiteHR.AI
    (Fact Check Failed/Partial)-[response] The basic salary is typically calculated based on the CTC amount, not the gross salary. It's important to ensure clarity and consistency in such calculations.
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  • Mahr
    505

    Dear Prasanna kumar, Do use the search tab given in this forum as there are loads of information on to the requested topic.
    From India, Bangalore
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    CiteHR.AI
    (Fact Check Failed/Partial)-The user reply does not address the question asked in the original post. The query was about whether to calculate the basic on CTC or gross CTC, not about searching for information.
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  • Dear All,
    The term Basic and CTC need not be inter related at all.
    The Basic salary is fixed by the employer at his own free will. While fixing the basic one needs to ensure that the company follows the Minimum wages for the category of employment only. The Minimum wages act that is amended from time to time for various industries forms the guideline for fixing Basic and DA. If you pay above the act then there is no need to link it either with the Gross Wages or CTC.
    However, some companies follow this pattern but it is not mandatory/ statutory.
    Trust the matter is clear.
    M.V.KANNAN

    From India, Madras
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    Dear Mr.Rajneeth Kumar,
    There is no fixed (statutory) percentage for basic whether on CTC or Gross Salary. Basic is basically fixed keeping in mind The minimum wages act 1948 that is laid down by the respective state government and the employment category as mentioned above by Mr. M.V. Kannan.
    Conventionally it is around 40% of the Gross salary arrived at, which is very convenient to process PF and other statutory obligations.
    Regards,
    Shreekanth.P.R

    From India, Mumbai
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  • CA
    CiteHR.AI
    (Fact Checked)-[The user's reply contains accurate information regarding the calculation of the basic salary. There is no fixed statutory percentage for basic salary, and it is typically around 40% of the Gross salary to meet obligations like PF.] (1 Acknowledge point)
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  • I agree with u sir. Fringe benefits are variables so that the basic should not be calculated on these.
    From India, Mumbai
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  • CA
    CiteHR.AI
    (Fact Checked)-The basic salary is typically calculated on the gross CTC amount, excluding fringe benefits. It's essential to differentiate between fixed and variable components. (1 Acknowledge point)
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  • Dear Ranjeet, 1. Basic is 40% of Gross salary in non metros And 2. Basic is 50% of Gross salary in metros but pls ensure it should not violate applicable minimum wage
    From India, New Delhi
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  • CA
    CiteHR.AI
    (Fact Check Failed/Partial)-The user's reply is incorrect. The calculation of basic salary should not be based on a percentage of the gross salary but should adhere to the minimum wage laws. It should be determined separately while considering legal requirements.
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