Hr, Legal Compliance & Er-ir
Recruitment, Training & Development,
Hr Professional
Hr Operations
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Respected all,
In my comapany, we were paying Rs.20,000 p.m. as basic salary to an employee. The same is already paid for the period April- October. Now the employee wants the salary restructure so that he can take the benefit of Medical Reimbursement, Leave travel concession, etc. which are exempted under the head salary.
Can we reduce the basic to Rs.15,000 p.m. for the remaining period of November-march and pay the balance Rs.(5,000*5) i.e. 25,000 for remaining five months as medical reimbursement and leave travel concession.
Please help.

From India, Calcutta
Dear Jyoti, Good Afternoon!!! kindly confirm that you are giving Rs. 20000/- as Basic or gross with any bifurcation..??
From India, New Delhi
Yes; you can restructure the salary.
For more information in this regard or reference on salary administration info, you may visit this payroll resources page

From India, Bangalore
Absolutely right Bhoopender. If an employee is member of EPF then PF contribution can not be reduced in any case which is directly related to Basic Salary.
If not then it can be reduced.

From India, Gurgaon
Thank you for the replies.
Please note:
The employee is not a member of EPF.
Rs. 20,000 is given as gross salary without any bifurcation.
Professional Tax of Rs. 130/- is deducted since it comes in the slab of 15000-25000.
No TDS ahs been deducted till now.
Bonus is separately paid @ 12.5% of (20000*12)
So can I restructure the salary as:
Basic Salary: 16000 p.m.
Transport Allowance: 1000 p.m.
Medical Reimbursement: 15,000 p.a.
Leave Travel Concession: 20,000 p.a.

From India, Calcutta
Dear Jyoti,
This is not will make affect on his/her compensation structure.....
Although, some organizations are giving LTC as per their norms and even it pays in every two years after confirmation of the said employee...
kindly check with ur HR Head and employee's Appointment letter...then only u can take right decision.
Bhagwan Tolani
TM Group

From India, Mumbai
Hi, I have attached the best compensation structure. Rgds, Arul D.
From India, Madras

Attached Files
File Type: xls Standard Compensation & Benefit.xls (14.5 KB, 5163 views)

The employee has no problem as he is doing so only for taxation benefit. So can I reduce the basic salary as given above in the middle of the year. Regards,
From India, Calcutta
Hi Arul The CTC breakup is perfect except Max. exemption of Conveyance Allowance shown as Rs. 800/- which is pm ie Rs. 9600/- pa Chandrakant
From India, Mumbai
Basic salary can not be reduced beyond the limit of the amount on which PF is already deposited in earlier months Best Regards Ashok
From India, Indore

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