From "sweetysingh" : 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
29th June 2007 From India, Delhi

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.
29th June 2007 From India, Mumbai
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
29th June 2007 From India, Delhi
Attached Files
File Type: doc tax_exemption_117.doc (80.0 KB, 4455 views)
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
1st July 2007 From India, Ahmadabad
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
5th July 2007 From India, Delhi
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.
5th July 2007 From India, Calcutta
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
17th July 2007
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
31st January 2008 From India, Mumbai
[Hi Sweetysingh,
You need to pay applicable minimum wages to all employees as per the notification from state government. It can be sub divided under any heads but when it comes to paying statutory benefits total minimum wages has to be considered. I am attaching here with verdict given by Asst. PF commissioner , Faidabad. It clearly states that basic can not be split.
Companies can't exploit its employees by spliting basic to lower levels & paying lesser contributions towards statutory benefits.
Hope this answers your querry.
Best Regards,
24th July 2008 From India, Mumbai
Attached Files
File Type: pdf EPF.pdf (442.0 KB, 818 views)
Hello All, I am also very confused on minimum basic, i have been told by my accounts that it is 3733, but i wonder. Can anybody help on this. Regards, Vibha
16th September 2008 From India, Ludhiana
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