Govt. Guidelines for Minimum Basic Salary .... Urgent - case studies

sweetysingh Started The Discussion:

Hi all,

Can anybody tell me that whether there is a govt. guideline for minimum basic salary? Here I am not talking about minimum wages. The question is for minimum basic salary.

What % of total salary shall be given as Basic salary?

Is there any rule which says that minimum basic should be 70% of the total / gross salary?

Is there any guideline that the minimum basic slaray should be Rs.2500/- pm?

The above are the sugessions given to me by some of my friends. They are also not very clear on this.

Need your help.


Sweety Singh

vikasdubey -  Member Since: Jun 2007
hi sweety...

I am also looking for same thing.I would like to know if their is some legal ceiling regarding components of salary especially basic.Also to what limit the other components are non taxable like Conveyance,Med. allowance, special Allowance etc.
I would appreciate if u send me the information about the topic.


sweetysingh -  Member Since: Jun 2007
Hi Vikas,

See the attachment (everything except the ceiling on basic salary is covered in it with case studies).

It will definitely help you.

Pls let me know if anything on Basic salary comes to your notice.

Sweety Singh

Attached FilesProvided by community member sweetysingh. Join us to learn and grow with your peers.
File Type: doc tax_exemption_117.doc (80.0 KB, 2898 views)
vikasdubey -  Member Since: Jun 2007
hi sweety Greetings of the day....... Thanx a ton for very usefull material........ bye vikas

bhavinvahia -  Member Since: Feb 2007
Dear Sweety,

To the best of my knowledge there is no such government rule, but you need to protect the minimum wages (i.e. Basic & DA) as fixed by the State Government.

Companies also have their own policy devised for deciding Basic looking to the cost Implications.

I hope this would throw some light.

Bhavin Vahia

sweetysingh -  Member Since: Jun 2007
Hi everybody! What’s up? 129 views and no answers??? Can anybody please help me? thanks, Sweety Singh

vikramlamhe -  Member Since: Nov 2005
As for as I know there is no such Govt rule/legislation for fixing of Minimum basic salary. State Govt revises minimum wages twice it in a year.

I have seen some employer further byfercating this minimum wages in to Basic,HRA,other allowances to reduce their Co. share pf amount, which is not legal.

Suppose if there is minimum wages is Rs.3510/- in any state, the employer will have to deposit 12 % above said amount in PF ( 8.33 % in Penson fund & 3.67 % in PF).


Vikram Singh

Anupama Saini -  Member Since: Nov 2006
Generelaly the rule which is followed is that the basic should not be less than 35% of the gross salary.

Now there is another picture to it.

In case of minimum wages ,the PF has to be deducted on the unskilled minimum wages at least which means that unskilled mimium wage will be the basic salary in all three cases(unskilled, semi-skilled, skilled) to avoid any problems during Pf inspection.


hrshah -  Member Since: Mar 2007
Originally Posted by sweetysingh
Hi Vikas,

See the attachment (everything except the ceiling on basic salary is covered in it with case studies).

It will definitely help you.

Pls let me know if anything on Basic salary comes to your notice.

Sweety Singh

It's a nice presentation. But according to me, it is as per the IncomeTax point of view. No labour act provide such groups or such limits.

Pl note that U have to follow the Minimum Wages act of the state and Industry in which your establishment covered. Here the authority define the Basic and D A of the particlar industry in a particular state.

I have noticed in many cases that employer give the salary as per the Minimum wages (i.e. total salary as per act) but they divide it in different component considering their financial burden towards PF / Bonus / ESI / Gratuity etc. etc.

Haresh Shah

Viral Shah -  Member Since: Jan 2008

Nice Question raised........... sorry mam....i also search for the same.......but thank u very i got few info........on such matter........

Thanks a lot to raise this question........

hope you will get more replies......... and we will improve our knowledge......what u think........ :)

Viral Shah


  • Do not post anything derogatory about any company or person.
  • Sharing articles from other websites should be done by posting a link to the original article.
  • To discuss sensitive issues create a pseudo/anonymous account.
  • Please avoid repeat posting your company profile - such accounts are removed automatically.

  • Found This Useful? +Vote Up This Via Google.  

    Why Vote? User validation is extremely important for good content to prosper.
    Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. The advice should be validated by proper consultation with a certified professional. The network or the members providing advice cannot be held liable for any consequences, under any circumstances.

    Cite.Co helps people come together to solve each other's problems on all aspects of professional life.
    Share This Discussion:

    3M Users, 100K+ Documents & 450K+ Discussions
    About Us - Advertise - Contact Us - RSS   On Google+  
    All trademarks and copyrights held by respective owners. Member comments are owned by the poster.
    Privacy Policy | Disclaimer | Terms Of Service
    Facebook Page | Follow Us On Twitter | Linkedin Network