Dear Members,
I am working with one of the Construction Companies in Mumbai. The Company has just secured a project for developing a residential cum commercial premises. The company has interviewed 2-3 senior civil engineers for the project. The salary would range from 9.5 to 11 Lacs per annum. I have to provide the breakdown of the salary, including Basic, DA, HRA, and other allowances like Medical & Conveyance. Given my background in Accounts, I am aware that the Conveyance of Rs. 800/-, Medical Reimbursement up to Rs. 15,000/- per annum, and HRA are exempted from Tax.
I am seeking clarification on the following points:
a) How is the Basic to be calculated based on the Salary?
b) Is there a specific law governing the calculation of Basic?
c) Should DA, HRA, and other Payments be calculated based on Basic only?
d) What are the alternative names for payments included in the Salary?
I am looking forward to your suggestions and guidance.
Thank you,
Vidya
From India, Mumbai
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I am working with one of the Construction Companies in Mumbai. The Company has just secured a project for developing a residential cum commercial premises. The company has interviewed 2-3 senior civil engineers for the project. The salary would range from 9.5 to 11 Lacs per annum. I have to provide the breakdown of the salary, including Basic, DA, HRA, and other allowances like Medical & Conveyance. Given my background in Accounts, I am aware that the Conveyance of Rs. 800/-, Medical Reimbursement up to Rs. 15,000/- per annum, and HRA are exempted from Tax.
I am seeking clarification on the following points:
a) How is the Basic to be calculated based on the Salary?
b) Is there a specific law governing the calculation of Basic?
c) Should DA, HRA, and other Payments be calculated based on Basic only?
d) What are the alternative names for payments included in the Salary?
I am looking forward to your suggestions and guidance.
Thank you,
Vidya
From India, Mumbai
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Hi Vidya,
a. Basic can be computed as 40-45% of the CTC. The higher the basic amount, the greater the savings in the hands of employees through PF and terminal benefits such as gratuity.
b. There is no standard for determining the basic amount, but it should not fall below the minimum wages.
c. In the private sector, there is no DA component by default, but it can be included if necessary.
d. Other components such as Children's Education allowance, club allowance, food coupons, gift coupons, car allowance, special allowance, performance-based allowance, etc., could also be considered.
Pon, Chennai
From India, Lucknow
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616a. Basic can be computed as 40-45% of the CTC. The higher the basic amount, the greater the savings in the hands of employees through PF and terminal benefits such as gratuity.
b. There is no standard for determining the basic amount, but it should not fall below the minimum wages.
c. In the private sector, there is no DA component by default, but it can be included if necessary.
d. Other components such as Children's Education allowance, club allowance, food coupons, gift coupons, car allowance, special allowance, performance-based allowance, etc., could also be considered.
Pon, Chennai
From India, Lucknow
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