Hi Sara,
Welcome.. :)
Ad-hoc allowance ..yes it would be taxed in the hands of employee..
Remember one thing ..one cannot be punished twice!! therefore either Tax or FBT but not both..
Keeping low basic helps in reducing the company liability on two accounts viz PF deduction, gratuity etc and cash flow in event of resignation or otherwise on leave encashment..but may increase the tax liability in the hands of employee since it reduces contribution of PF to the tax shield of Rs 1 lac as well..so one needs to balance it out..
Sara, it would be difficult to elucidate the same here..
Why don't you email me your exact intentions & tentative break up of salary..my official email ID is
would study the same and guide you..
Cheers,
Rajat
From India, Pune
101Welcome.. :)
Ad-hoc allowance ..yes it would be taxed in the hands of employee..
Remember one thing ..one cannot be punished twice!! therefore either Tax or FBT but not both..
Keeping low basic helps in reducing the company liability on two accounts viz PF deduction, gratuity etc and cash flow in event of resignation or otherwise on leave encashment..but may increase the tax liability in the hands of employee since it reduces contribution of PF to the tax shield of Rs 1 lac as well..so one needs to balance it out..
Sara, it would be difficult to elucidate the same here..
Why don't you email me your exact intentions & tentative break up of salary..my official email ID is
Cheers,
Rajat
From India, Pune
Thanx rajat,
thankx for helping me & guiding me at all stages,
basically i was planning to revise our old salary srtucture which did not extended any tax benefits to employees.
so i was on lookout for an salary structure which will provide benefits to both employers and employees.
last week i had an meeting with our company CA, who explained that i cannot have best of both worlds , i was aware that if any attribute/allowance( apart from what we discussed and agreed earlier ) if debited from salary account is taxed in hands of employees and if debited from P & L account of Company is attracting FBT. anything cannot be taxed twice.
So i needed to choose one of the course,taking consensus of Mgmnt.
anyways, finally i have devised an salary structure trying tobalance both.
thanks for all your help thro'out the process.
Interacting at this forum , has helped me solve many of the HR queries
thanks and all the best ,& lets be in touch thro' this forum.
sara
From India
thankx for helping me & guiding me at all stages,
basically i was planning to revise our old salary srtucture which did not extended any tax benefits to employees.
so i was on lookout for an salary structure which will provide benefits to both employers and employees.
last week i had an meeting with our company CA, who explained that i cannot have best of both worlds , i was aware that if any attribute/allowance( apart from what we discussed and agreed earlier ) if debited from salary account is taxed in hands of employees and if debited from P & L account of Company is attracting FBT. anything cannot be taxed twice.
So i needed to choose one of the course,taking consensus of Mgmnt.
anyways, finally i have devised an salary structure trying tobalance both.
thanks for all your help thro'out the process.
Interacting at this forum , has helped me solve many of the HR queries
thanks and all the best ,& lets be in touch thro' this forum.
sara
From India
Hi Sara,
Am glad you find the solution of finding the right mix ..a rather balance between the two..which is the tough job.. :)
Welcome..if you any need further assistance please feel to ask..
Cheers,
Rajat
From India, Pune
Am glad you find the solution of finding the right mix ..a rather balance between the two..which is the tough job.. :)
Welcome..if you any need further assistance please feel to ask..
Cheers,
Rajat
From India, Pune
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SALARY CAN BE SPLIT INTO COMPONENTS BUT NOT LESS THAN THE MINIMUM WAGES.docx