Dear All,
I want your urgent suggestions. Pls check if the breakups are generaly correct and also tell do they have any statutory implications.
Rs.4, 000/- Per Month:Salary
Basic- Rs.1600/-
HRA- Rs.16, 00/-
Conveyance- Rs. 4, 00/-
Uniform Allowance- Rs. 200/-
Spl. Allowance- Rs.200/-
--------------------------------------------------------------------------
Rs. 5,000/- Per Month:Salary
Basic- Rs.2, 000/-
HRA- Rs. 1,600/-
Conveyance- Rs.4, 00/-
Uniform Allowance- Rs. 2, 00/-
Spl. Allowance- Rs. 3, 00/-
Medical Allowance- Rs. 5, 00/-
---------------------------------------------------------------------------------
Rs. 6,000/- Per Month:Salary
Basic- Rs. 2,400/-
HRA- Rs. 1,600/-
Conveyance- Rs.4, 00/-
Uniform Allowance- Rs. 2, 00/-
Spl. Allowance- Rs. 9, 00/-
Medical Allowance- Rs. 5,00/-
---------------------------------------------------------------------------------
Rs. 8,500/- Per Month:Salary
Basic- Rs.3, 400/-
HRA- Rs. 2,500/-
Conveyance- Rs. 4, 00/-
Uniform Allowance- Rs. 2, 00/-
Special Allowance- Rs. 1, 000/-
Medical Allowance- Rs. 1,000/-
--------------------------------------------------------------------------------
Regards and Cheers
Satyabrata Tripathy
From India, New Delhi
I want your urgent suggestions. Pls check if the breakups are generaly correct and also tell do they have any statutory implications.
Rs.4, 000/- Per Month:Salary
Basic- Rs.1600/-
HRA- Rs.16, 00/-
Conveyance- Rs. 4, 00/-
Uniform Allowance- Rs. 200/-
Spl. Allowance- Rs.200/-
--------------------------------------------------------------------------
Rs. 5,000/- Per Month:Salary
Basic- Rs.2, 000/-
HRA- Rs. 1,600/-
Conveyance- Rs.4, 00/-
Uniform Allowance- Rs. 2, 00/-
Spl. Allowance- Rs. 3, 00/-
Medical Allowance- Rs. 5, 00/-
---------------------------------------------------------------------------------
Rs. 6,000/- Per Month:Salary
Basic- Rs. 2,400/-
HRA- Rs. 1,600/-
Conveyance- Rs.4, 00/-
Uniform Allowance- Rs. 2, 00/-
Spl. Allowance- Rs. 9, 00/-
Medical Allowance- Rs. 5,00/-
---------------------------------------------------------------------------------
Rs. 8,500/- Per Month:Salary
Basic- Rs.3, 400/-
HRA- Rs. 2,500/-
Conveyance- Rs. 4, 00/-
Uniform Allowance- Rs. 2, 00/-
Special Allowance- Rs. 1, 000/-
Medical Allowance- Rs. 1,000/-
--------------------------------------------------------------------------------
Regards and Cheers
Satyabrata Tripathy
From India, New Delhi
1
Dear Ruby,
Thanks for a prompt response.
What I know is Basic could be 30-40% of the CTC, whereas HRA can be 30- 50% of the CTC. Is that information correct?
The salary ranges do not fall under Tax bracket. So does TDS compliance applicable?
Cheers
Satyabrata Tripathy
From India, New Delhi
Thanks for a prompt response.
What I know is Basic could be 30-40% of the CTC, whereas HRA can be 30- 50% of the CTC. Is that information correct?
The salary ranges do not fall under Tax bracket. So does TDS compliance applicable?
Cheers
Satyabrata Tripathy
From India, New Delhi
Hi Tripathy,
The basic varies 30-40%
and HRA being 40-50 % (for non metro its 40% & metro its 50 % )
So your information is absolutely correct.
Min limit is 1.10 LPA (above this is applicable for taxes .)
For female its 1.45Lpa .
So TDS is equally applicable for income ranges specified by you.
Let me know if I am wrong .
Others citehr members ...please do comment on this ....
Cheers
Rubi
From India, Bangalore
The basic varies 30-40%
and HRA being 40-50 % (for non metro its 40% & metro its 50 % )
So your information is absolutely correct.
Min limit is 1.10 LPA (above this is applicable for taxes .)
For female its 1.45Lpa .
So TDS is equally applicable for income ranges specified by you.
Let me know if I am wrong .
Others citehr members ...please do comment on this ....
Cheers
Rubi
From India, Bangalore
Dear All,
Your messages on the above topic suggest as if the limits under discussion have any statutory requirement - this is not correct.
In none of the labour laws, it is written how much of CTC should be basic and all that.
Normally salary structuring is carried out keeping in view to have minimal tax incident on employee and to increase his cash flows.
So long as you are talking about Salary upto Rs. 8500, absolutely no problem with any structure you choose - there would not be tax implication.
However as you move up you normally do the following:-
We normally keep basic salary around 30% of CTC for following reasons:-
1. PF contribution - employer shall be tax free. Hence more the basic, more employer contribution to PF and less taxability.
2. HRA is normally kept in line with Income tax rules to garner maximum possible tax benefit.
3. Keep special allowance minimal or eliminate it altogather and adjust it in Basic and HRA - this way you can save tax on tax-free HRA
However if you want to keep cash flow of employees high, keep special allowance very high so that there is very little money allocated to Basic Salary and accordingly lesser Employee PF deduction and Employer PF contribution - obviously it comes with price tag of higher tax outgo.
4. Instead of medical allowance, name the component as Medical Reimbursements It will be tax free upto Rs. 15k per year subject to production of actual bills of expenditure.
5. Conveyance allowance - Keep it Rs. 800 per month
Hope all this make sense.
Regards,
Rajat
From India, Lucknow
Your messages on the above topic suggest as if the limits under discussion have any statutory requirement - this is not correct.
In none of the labour laws, it is written how much of CTC should be basic and all that.
Normally salary structuring is carried out keeping in view to have minimal tax incident on employee and to increase his cash flows.
So long as you are talking about Salary upto Rs. 8500, absolutely no problem with any structure you choose - there would not be tax implication.
However as you move up you normally do the following:-
We normally keep basic salary around 30% of CTC for following reasons:-
1. PF contribution - employer shall be tax free. Hence more the basic, more employer contribution to PF and less taxability.
2. HRA is normally kept in line with Income tax rules to garner maximum possible tax benefit.
3. Keep special allowance minimal or eliminate it altogather and adjust it in Basic and HRA - this way you can save tax on tax-free HRA
However if you want to keep cash flow of employees high, keep special allowance very high so that there is very little money allocated to Basic Salary and accordingly lesser Employee PF deduction and Employer PF contribution - obviously it comes with price tag of higher tax outgo.
4. Instead of medical allowance, name the component as Medical Reimbursements It will be tax free upto Rs. 15k per year subject to production of actual bills of expenditure.
5. Conveyance allowance - Keep it Rs. 800 per month
Hope all this make sense.
Regards,
Rajat
From India, Lucknow
Hi Satyabrata,
The contents of the salary break up may be as below, you can prepare it at the suitability of your own. HRA would be 50 or 60% of basic.
Basic
HRA 40 -60% is exempted from Taxes, depends on class of city
CCA - 825/- is exempted from tax
Other Allowance
Mobile Reimbursement
Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.
Getting more than this will be covered under Mediclaim or it depends on company policy
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia
Annual Total Cost = AFGC + PF+ESIC
Annual total cost is also called as CTC.
Apart from this Food coupons, Holiday package and Furnishing items are included in their CTC.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
The contents of the salary break up may be as below, you can prepare it at the suitability of your own. HRA would be 50 or 60% of basic.
Basic
HRA 40 -60% is exempted from Taxes, depends on class of city
CCA - 825/- is exempted from tax
Other Allowance
Mobile Reimbursement
Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.
Getting more than this will be covered under Mediclaim or it depends on company policy
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia
Annual Total Cost = AFGC + PF+ESIC
Annual total cost is also called as CTC.
Apart from this Food coupons, Holiday package and Furnishing items are included in their CTC.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
Dear All,
For basic salary, keep Minimum wages in mind.
There is no fix guidelines provided about the basic salary and percentage of its in CTC.
In Maharashtra, HRA shall be minimum 40 % .
Conveyance max 800.
Education 200
City Compensatory Allowance -- You can fix any amount but, no exemption under Income Tax.
Medical 1250
Food Coupons max 1500
Nitin Nikam
For basic salary, keep Minimum wages in mind.
There is no fix guidelines provided about the basic salary and percentage of its in CTC.
In Maharashtra, HRA shall be minimum 40 % .
Conveyance max 800.
Education 200
City Compensatory Allowance -- You can fix any amount but, no exemption under Income Tax.
Medical 1250
Food Coupons max 1500
Nitin Nikam
Amit's message :
HRA 40 -60% is exempted from Taxes, depends on class of city
My comments
It should be 40 or 50%. 60% HRA is nowhere exempt
Nitin's Message:
In Maharashtra, HRA shall be minimum 40 % .
My comments - I think this is not validated. I could not search this notification / regulation. Plz provide the source of same
Regards,
Rajat
From India, Lucknow
HRA 40 -60% is exempted from Taxes, depends on class of city
My comments
It should be 40 or 50%. 60% HRA is nowhere exempt
Nitin's Message:
In Maharashtra, HRA shall be minimum 40 % .
My comments - I think this is not validated. I could not search this notification / regulation. Plz provide the source of same
Regards,
Rajat
From India, Lucknow
Dear Mr Tripathi,
As far as according to my practical knowledge and the prevailing labour laws, the basic salary should contain minimum wages as specified by labour dept for various categories. The balance amount can be bifurcated accordingly. This will safeguard your organisation's interests in present and future also.
Thanks
Amit Gera
From India, New Delhi
As far as according to my practical knowledge and the prevailing labour laws, the basic salary should contain minimum wages as specified by labour dept for various categories. The balance amount can be bifurcated accordingly. This will safeguard your organisation's interests in present and future also.
Thanks
Amit Gera
From India, New Delhi
Hi Satya,
Very essential point to remember while structuring salary is minimum wage. Basic should be according to minimum wages to respective state. In the first case gross salay is Rs 4000/- now depends the state where you are structuring the salary. minimum wage should be maintained, otherwise labour issue crop up. another thing HRA should be 40% in case of non metro and 50% in metro of basic, conveyance and Medical allowance should not greater than 800/- and 1250/- respectively pm. rest if balance should either be given in variable/ flexi pay or special allowance, depends upon company to compay.
Above said norms should keep in mind while structuring of salary.
Thanks
Vijay
From India, Mumbai
Very essential point to remember while structuring salary is minimum wage. Basic should be according to minimum wages to respective state. In the first case gross salay is Rs 4000/- now depends the state where you are structuring the salary. minimum wage should be maintained, otherwise labour issue crop up. another thing HRA should be 40% in case of non metro and 50% in metro of basic, conveyance and Medical allowance should not greater than 800/- and 1250/- respectively pm. rest if balance should either be given in variable/ flexi pay or special allowance, depends upon company to compay.
Above said norms should keep in mind while structuring of salary.
Thanks
Vijay
From India, Mumbai
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