Hi Seniors,
I am working in a BPO outsourcing company as a HR. My Managing Director ask me to create a salary slip for him with CTC of Rs. 2,100,00. I mentioned everything as per rules. As it is a start up venture(4 months) we do not have any PF E.S.I. Kindly check below details:
Rate of Salary/Wages
a) Basic ₹ 84,000.00 (40%)
b) House Rent Allowances ₹ 33,600.00 (40%)
c) Conveyance ₹ 800.00
d) Medical Allowances ₹ 1,250.00
e)Mobile Allowances ₹ 5,000.00
e) Special Allowances ₹ 90,350.00
Total CTC: ₹ 2,100,00.00
Please seniors kindly let me know what else i need to change or add. Please help me ASAP.
Regards,
Sangeeta Debnath.
From India, Bangalore
2I am working in a BPO outsourcing company as a HR. My Managing Director ask me to create a salary slip for him with CTC of Rs. 2,100,00. I mentioned everything as per rules. As it is a start up venture(4 months) we do not have any PF E.S.I. Kindly check below details:
Rate of Salary/Wages
a) Basic ₹ 84,000.00 (40%)
b) House Rent Allowances ₹ 33,600.00 (40%)
c) Conveyance ₹ 800.00
d) Medical Allowances ₹ 1,250.00
e)Mobile Allowances ₹ 5,000.00
e) Special Allowances ₹ 90,350.00
Total CTC: ₹ 2,100,00.00
Please seniors kindly let me know what else i need to change or add. Please help me ASAP.
Regards,
Sangeeta Debnath.
From India, Bangalore
Hi Seniors,
Some more points are mentioned below:-
1. As this calculation for PER MONTH wise. So CTC will be Rs. 2,10,000 (Two Lakh Ten Thousand Rupees) per month. SO kindly let me know about the calculation and deduction what should i have to calculate.
2. He told me to create for 3 month salary slip. As he wants to apply for Credit Card.
3. He is Managing Director and Founder of the Company.
4. There is no PF & ESI account.
I am in bit confusion. Kindly help me out.
Thanks In advanced
Regards
Sangeeta Debnath
From India, Bangalore
Some more points are mentioned below:-
1. As this calculation for PER MONTH wise. So CTC will be Rs. 2,10,000 (Two Lakh Ten Thousand Rupees) per month. SO kindly let me know about the calculation and deduction what should i have to calculate.
2. He told me to create for 3 month salary slip. As he wants to apply for Credit Card.
3. He is Managing Director and Founder of the Company.
4. There is no PF & ESI account.
I am in bit confusion. Kindly help me out.
Thanks In advanced
Regards
Sangeeta Debnath
From India, Bangalore
Dear Sangeeta,
Bifurcation is fine as start up venture and you can add more tax free (Full or Partial) heads as mentioned below but i will suggest that you must fix the compensation policy first followed by grading system to avoid any hassle in future..
1. Basic - Income
Tax Benefit: Fully Taxable
2. House Rent Allowance (HRA) - Maximum 50% basic (Metro cities) 40% basic (non metro cities).
Tax Benefit:Excess of Actual rent paid over 10% of Basic salary OR Maximum HRA allowed (50% or 60% of basic) OR Actual Rent Paid – whichever is lower is Exempt from Tax.
3. Transport Allowance - Supposed to be conveyance allowance meant for transportation between office and residence only.
Tax Benefit:Exempt maximum up to Rs.800/- per month. No proof required.
4.Children’s education allowance - Tax Benefit: Rs.100 per child subject to max 2 children. Hence maximum Rs.200/- is exempt.
5. Medical Allowances / Reimbursements - Can be given against bills or without bills does not matter. Some companies give it monthly, some quarterly, half yearly or yearly also. Some companies give it only against medical bills, some do not ask for bills, rather bills are only demanded for Final Tax Computation at the end of the year. No thumb rule about it. Preferred to pay monthly, without bills and ask bills as per your wish, quarterly, half yearly or at the end of the year. Do not choose to give it against bills only, there is no rule for the same…It only makes salary processing a cumbersome process.
Tax Benefit: Maximum Rs.1250/- p.m. (Rs.15000 p.a.) is exempt only if Original Bills are provided.
6. Telephone Reimbursement: Exempted upto Rs.1500 per month( Need to produce bills)- Sec 10
7. Books & Periodical Reimbursement: Actual Expenses ( Need to Produce Bills)
8. VM Reimbursement: Actual Expenses ( Need to produce bills)
9. Special Allowances - Balancer (Fully Taxable)
From India, Kota
Bifurcation is fine as start up venture and you can add more tax free (Full or Partial) heads as mentioned below but i will suggest that you must fix the compensation policy first followed by grading system to avoid any hassle in future..
1. Basic - Income
Tax Benefit: Fully Taxable
2. House Rent Allowance (HRA) - Maximum 50% basic (Metro cities) 40% basic (non metro cities).
Tax Benefit:Excess of Actual rent paid over 10% of Basic salary OR Maximum HRA allowed (50% or 60% of basic) OR Actual Rent Paid – whichever is lower is Exempt from Tax.
3. Transport Allowance - Supposed to be conveyance allowance meant for transportation between office and residence only.
Tax Benefit:Exempt maximum up to Rs.800/- per month. No proof required.
4.Children’s education allowance - Tax Benefit: Rs.100 per child subject to max 2 children. Hence maximum Rs.200/- is exempt.
5. Medical Allowances / Reimbursements - Can be given against bills or without bills does not matter. Some companies give it monthly, some quarterly, half yearly or yearly also. Some companies give it only against medical bills, some do not ask for bills, rather bills are only demanded for Final Tax Computation at the end of the year. No thumb rule about it. Preferred to pay monthly, without bills and ask bills as per your wish, quarterly, half yearly or at the end of the year. Do not choose to give it against bills only, there is no rule for the same…It only makes salary processing a cumbersome process.
Tax Benefit: Maximum Rs.1250/- p.m. (Rs.15000 p.a.) is exempt only if Original Bills are provided.
6. Telephone Reimbursement: Exempted upto Rs.1500 per month( Need to produce bills)- Sec 10
7. Books & Periodical Reimbursement: Actual Expenses ( Need to Produce Bills)
8. VM Reimbursement: Actual Expenses ( Need to produce bills)
9. Special Allowances - Balancer (Fully Taxable)
From India, Kota
Dear Sangeeta, Deduction you need take care of in salary Slip are as follows:- 1. Professional TAX 2. PF (If Applicable) 3. ESI (If Applicable)
From India, Kota
From India, Kota
Dear Akhil Sir,
Thanks for your valuable reply.
I need to know for Managing Director what should be the proper salary break up. Because this is a huge CTC. Its Rs. 210,000. PM (Two Lakh Ten Thousand). As I mentioned above my thread, the salary break up is correct? I am issuing that format to employees. But I am bit confused because here Managing Director CTC is very huge. So kindly suggest me on that topic.
Thanks in advanced.
Regards,
Sangeeta Debnath.
From India, Bangalore
Thanks for your valuable reply.
I need to know for Managing Director what should be the proper salary break up. Because this is a huge CTC. Its Rs. 210,000. PM (Two Lakh Ten Thousand). As I mentioned above my thread, the salary break up is correct? I am issuing that format to employees. But I am bit confused because here Managing Director CTC is very huge. So kindly suggest me on that topic.
Thanks in advanced.
Regards,
Sangeeta Debnath.
From India, Bangalore
Dear Sangeeta,
Kindly re check your total mentioned above it coming 2,15,000. Break up is correct you can generate salary slip with deduction of professional tax as per below placed details:-
Karnataka
upto Rs.9,999/- Nil
Rs.10,000/- to Rs.14,999/- Rs.150/-
Rs.15,000/- and above Rs.200/-
Source: http://pt.kar.nic.in/(S(enjefpml3y0u...T_Schedule.pdf
From India, Kota
Kindly re check your total mentioned above it coming 2,15,000. Break up is correct you can generate salary slip with deduction of professional tax as per below placed details:-
Karnataka
upto Rs.9,999/- Nil
Rs.10,000/- to Rs.14,999/- Rs.150/-
Rs.15,000/- and above Rs.200/-
Source: http://pt.kar.nic.in/(S(enjefpml3y0u...T_Schedule.pdf
From India, Kota
Dear Sangeeta,
Gone through your query . But its not clear from your posting that you use to have any standard salary break up in your organisation or not.Or simply a fixed amount is being transferred to employees account or they use to get payment through cash.
Also after seeing your salary break up want to tell you that as per you total CTC is 210000. But if you will add it again you will find that total CTC is 215000. May be in this mobile reimbursement is not added. if so then pls mention that in note or after CTC.
Also If you are giving Medical reimbursement , you can also give LTA. It use to be as per company policy. Secondaly LTA is 15% of the basic. He can have tax benefit on that.And this LTA amount can be adjusted from Specail Allowance amount.
Also on such a senior level to save the taxes basically few reimbursement use to be added like Car hire reimbursement, Entertainment reimbursement etc
Rest seems ok. Also want to remind you that you have to make salary slip. So, I hope you are having its format or you can easily find it on internet.
Specially you have to write name, designation , date of joining, paid days (as he is director so his paid days will always be full), leave etc.
Also whether you will make this on excel or word make sure to convert it in pdf before sending it further.
All The Best!
From India, Delhi
Gone through your query . But its not clear from your posting that you use to have any standard salary break up in your organisation or not.Or simply a fixed amount is being transferred to employees account or they use to get payment through cash.
Also after seeing your salary break up want to tell you that as per you total CTC is 210000. But if you will add it again you will find that total CTC is 215000. May be in this mobile reimbursement is not added. if so then pls mention that in note or after CTC.
Also If you are giving Medical reimbursement , you can also give LTA. It use to be as per company policy. Secondaly LTA is 15% of the basic. He can have tax benefit on that.And this LTA amount can be adjusted from Specail Allowance amount.
Also on such a senior level to save the taxes basically few reimbursement use to be added like Car hire reimbursement, Entertainment reimbursement etc
Rest seems ok. Also want to remind you that you have to make salary slip. So, I hope you are having its format or you can easily find it on internet.
Specially you have to write name, designation , date of joining, paid days (as he is director so his paid days will always be full), leave etc.
Also whether you will make this on excel or word make sure to convert it in pdf before sending it further.
All The Best!
From India, Delhi
You may keep following break-up:
Basic 40.0% =84000
HRA 20.0% =42000
Uniform Reimbursement 5.0% =10500
Books & Periodicals Reim. 5.0% =10500
Transportation Allowance 4.0% = 8400
Mobile Reimbursement 3.0% = 6300
Medical Reimbursement 2.0% = 4200
Leave Travel Allowance 9.0%=18900
Special Allowance 12.0% = 25200
Total 100.0% =210000
There must be deductions of P.Tax & I.Tax as per rules applicable to your unit.
Regards
RKB
From India, Gandhidham
Basic 40.0% =84000
HRA 20.0% =42000
Uniform Reimbursement 5.0% =10500
Books & Periodicals Reim. 5.0% =10500
Transportation Allowance 4.0% = 8400
Mobile Reimbursement 3.0% = 6300
Medical Reimbursement 2.0% = 4200
Leave Travel Allowance 9.0%=18900
Special Allowance 12.0% = 25200
Total 100.0% =210000
There must be deductions of P.Tax & I.Tax as per rules applicable to your unit.
Regards
RKB
From India, Gandhidham
As you may know there are diff. views for different purposes.
First of all let me ask you this- For a credit card application purpose such a detailed analysis may not be necessary. Probably the bank might ask you to attach the latest ITR.V (or other applicable Form) as a proof of filing his IT Return which should suffice the purpose, that's it.
Then next is - He being the founder/MD he must be a share holder assuming that yours' must be either a partnership firm or a ltd. Co. in which case he should be entitled for a share from the Profits/(Losses) sorry to say this)of the firm. In which case the so called concept of 'Salary' to him might require rethinking. However If you are right to ask only CTC break up irrespective of the above then you might consider these options as well from the point of view of IT etc.:
1. Instead of Transport allowance he is entitled for an official car in which case this allowance may not be necessary, as the allow. over and above the limit attract Tax. Also you might consider only reimbursement against bills from a travel co.for his official use. Otherwise IT on 'Perks' might be attacted.
2. There is also an option of free or on concessional rent, a bungalow accommodation for him as a perk;
3. He is also entitled for certain amount as 'Entertainment Allw' which is exempted from Tax upto certain limits.
4. Club membership
5. Business promotion expenses
6. Instead of Medical allowance consider reimbursement of Medical Exp. against bills
7. Similarly LTA, instead of allowance consider reimbursement against bills.
However I would also suggest that if you have to do it rightly better finalise this in consultation with your Auditors who will have overall view of your MD's status in the business.
From India, Bangalore
First of all let me ask you this- For a credit card application purpose such a detailed analysis may not be necessary. Probably the bank might ask you to attach the latest ITR.V (or other applicable Form) as a proof of filing his IT Return which should suffice the purpose, that's it.
Then next is - He being the founder/MD he must be a share holder assuming that yours' must be either a partnership firm or a ltd. Co. in which case he should be entitled for a share from the Profits/(Losses) sorry to say this)of the firm. In which case the so called concept of 'Salary' to him might require rethinking. However If you are right to ask only CTC break up irrespective of the above then you might consider these options as well from the point of view of IT etc.:
1. Instead of Transport allowance he is entitled for an official car in which case this allowance may not be necessary, as the allow. over and above the limit attract Tax. Also you might consider only reimbursement against bills from a travel co.for his official use. Otherwise IT on 'Perks' might be attacted.
2. There is also an option of free or on concessional rent, a bungalow accommodation for him as a perk;
3. He is also entitled for certain amount as 'Entertainment Allw' which is exempted from Tax upto certain limits.
4. Club membership
5. Business promotion expenses
6. Instead of Medical allowance consider reimbursement of Medical Exp. against bills
7. Similarly LTA, instead of allowance consider reimbursement against bills.
However I would also suggest that if you have to do it rightly better finalise this in consultation with your Auditors who will have overall view of your MD's status in the business.
From India, Bangalore
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