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Rajat Joshi
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Hi, Can anyone please explain that why salary split-up is done Eg: Basic House Rent Allowances Medical Allowances DA What is the benefit of having salary structure. Thanks & Regards cgnanij
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Hi Cgnanij,

The salary components are split for the following reasons:
  1. Tax benefits
  2. Ease of administration of C&B.
  3. Standardization of the components
  4. Statutory requirements
Medical allowance – Rs 15 K – not taxable provided the employees give the medical bills.

PF -12 % is levied on the Basic salary which is a statutory requirement and also provides the employee tax benefit understand section 81 D while computing his taxable income.

HRA – here again one gets the tax benefit by providing the actual rent receipts as per the IT tax act.

The essence of the salary structure is to provide the balance in tax benefits to employees viz higher take home salary as per the IT Act and also meet the statutory requirements.


Salary split up is done in the following way
Basic 40%
HRA 20%
Medical allowance 10%
miscellaneous 1%
conveyance 6%
education 13%
in addition to that we have PF which explained above nicely.if you want to know more about PF and ESI then u can mail me at

Can you please help me in the salary split of an Administraction Head( conveyance part)(traveling/ food cost)
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