Dear Seniors, Please Confirm Me about the taxable parts of a salary.Can U Please provide me a Ideal Sal Structure ? Thanx With Due Regards Tribikram
From India, Delhi
1From India, Delhi
Income Tax is based on annual CTC (or Total Income) which includes all perks & perquisities.
Gross Salary is the total salary received on MONTHLY BASIS. This excludes the annual components like LTA, bonus etc.
CTC is Gross Pay + annual components + perks/benefits/perquisites, whether in cash or kind.
Net pay is the take-home pay, after all deductions.
Non-cash components like driver, sweeper, company accomodation etc which the employee does not pay for are excluded. they are part of CTC
----------------------
BASIC = 25-30% of CTC
HRA = Maximum 50% basic (Metro cities) 40% basic (non metro cities)
Conveyance = Rs 800 (Max)
PF = 12% of basic (employers and employees contribution)
ESI = 4.75% of gross salary (Employers contribution)
= 1.75% of gross salary (Employees Contribution)
these are the must components.
------------------------
in case you have more Reimbursements; the better its from tax perspective.
The medical . TAX EXEMPET TO 15,000/-pa
Insurance (medical) - exepmt
You can also pay Reimbursement of Uniform Expenses on half yearly or annual basis(it can not be paid on monthly or quarterly basis as you generally do not give more than two uniforms in a year.
The LTA should be paid once in two years to save tax. If you do not want your employees to save on tax, you can pay it annually. In that case they will be able to save on tax on every alternate year (or to be precise only twice in a block of four years)
Employees who are out side the purview of Bonus Act can be paid a fixed amount or a fixed percentage of basic as bonus every year.
you can pay annual incentives either linked to profitability of the Company or employee's performance parameters of the employee.
you also have the option of Leasing a car or house for employee tax benefits.
the list is endless. but please do consult your taxman/ CA before all applicable rules.
Gross Salary is the total salary received on MONTHLY BASIS. This excludes the annual components like LTA, bonus etc.
CTC is Gross Pay + annual components + perks/benefits/perquisites, whether in cash or kind.
Net pay is the take-home pay, after all deductions.
Non-cash components like driver, sweeper, company accomodation etc which the employee does not pay for are excluded. they are part of CTC
----------------------
BASIC = 25-30% of CTC
HRA = Maximum 50% basic (Metro cities) 40% basic (non metro cities)
Conveyance = Rs 800 (Max)
PF = 12% of basic (employers and employees contribution)
ESI = 4.75% of gross salary (Employers contribution)
= 1.75% of gross salary (Employees Contribution)
these are the must components.
------------------------
in case you have more Reimbursements; the better its from tax perspective.
The medical . TAX EXEMPET TO 15,000/-pa
Insurance (medical) - exepmt
You can also pay Reimbursement of Uniform Expenses on half yearly or annual basis(it can not be paid on monthly or quarterly basis as you generally do not give more than two uniforms in a year.
The LTA should be paid once in two years to save tax. If you do not want your employees to save on tax, you can pay it annually. In that case they will be able to save on tax on every alternate year (or to be precise only twice in a block of four years)
Employees who are out side the purview of Bonus Act can be paid a fixed amount or a fixed percentage of basic as bonus every year.
you can pay annual incentives either linked to profitability of the Company or employee's performance parameters of the employee.
you also have the option of Leasing a car or house for employee tax benefits.
the list is endless. but please do consult your taxman/ CA before all applicable rules.
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Salary-Note.doc
SALARY SHEET CALCULATION.xls