In the Organization, I am currently working, some very senior members (GM Level) wants to increase their basic. Currently the Basic is 30% of CTC. They want to increase the basic to 40% or 50%. Can you please guide me as to what will be the implications on the Company if the basic is increased and how this can be avoided. I am unable to argue the same as they claim that this increase will help them save tax in their salary. My boss relies on me to give correct guidance on these matters.
Can someone help me with the same immediately.
As per the statutory requirement the BP should be min 40% and max 60% of Gross Salary. It depends on the Company on what to opt.
As you are saying if the PF is included in the CTC than there wouldn't be much burden to the Company other than bearing the Administrative Charges of the same. (PF Policy is flexible)
Other than PF what are the other Components included in the CTC? If ESI is included than the Company contribution would be 3.75% on BP + DA.
Also discuss with your accounts department before forming any decision.
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