Hope it helps :D
HRA (Exemption : you need to show rent agreement)
Medical up to 15,000/-(PA)Exemption
Childrens Allowances up to Two (Exemption)
Vehicle allowances (Exemption up to perticular amount extent)
Rest of amount u may take special allowances
It is a wrong practice to compute salary from the gross/ total coming downwards to net take home salary. It is also a wrong practice to fix Basic Salary as a percentage of gross/ total/ "CTC". Instead, the basic salary should come first and all other allowances added up to form the total/ gross salary. From the total salary, deductions such as PF/ ESI, IT, PT etc shall be deducted to arrive at the net (take Home) salary.
In a good salary structure Dearness Allowance will form a major part. DA will be a fixed percentage of the Basic Salary. Therefore, higher the basic the higher will be the DA. Similarly, House Rent Allowance shall also be taken as a fixed percentage of the Basic Salary. Allowances in real terms shall also form form part of salary. But at any cost employer's contribution (statutory) to EPF/ ESI shall be shown as part of salary. There are companies which show the employer's contribution to EPF/ ESI as part of salary and the same will also be shown as deducted along with employees contribution. This practice is dangerous.
If medical allowance is paid irrespective of production of medical bills, then it will form part of salary whereas if the same is paid on production of bills or under a declaration to the effect that such amount has been spent during the month/ period, then the amount will not form part of salary but it will be regarded as 'reimbursement' and it should be shown separately as added to the Net Salary.
Some companies salary package include LTA but the same will be shown as deduction every month. If as per terms of appointment LTA is a part of salary, then it becomes a regular payment and you cannot deduct from the salary. An employer is entiltled to deduct only the amounts which the employer has spent on behalf of the employee, like LIC premium paid by the employer on behalf of employee, house accommodation provided, electricity bill of the house accommodation provided etc.
Similarly, do not show the gratuity as part of salary and deduct it from salary. It is suppose to be paid by the employer when the employee leaves after 5 years of service. But if the employer goes on showing gratuity as deducted from salary (certainly the CTC) and if the employee leaves without completing 5 years of service, then the employer will defenitely be liable to pay the amount deducted even if the employee is not eligible for gratuity.
I believe that showing such things like employers contribution to PF/ ESI, LTA, gratuity, bonus etc in the salary is just to boost the salary and to attract new aspirants. This system, referred to as CTC, will lead to very dangerous situation in future. I have made postings on it many times and I know that new HRs will not agree with me. But when we analyse the present situation, whatever I had pointed out about CTC ( there is an article titled CTC Vs. BTC in my blog also) is becoming a reality. Many new generation companies have started paying only basic salary and many have asked me about it also. While taking up employment if they were offered salary of Rs 40000, they are actually getting far less than that after deduction of gratuity, bonus, PF etc etc. Therefore, be specefic in salary and it should be tailored in such a way that what an employee earns should be shown first and what he has to pay the employer for any facilities provided and what he has to contribute towards social security measures of the company and the government should be shown as deducted from the earnings. The net will be the salary he gets. In addition, if he gets any reimbursements that shall be added to the take home pay for the month.
i am working in a B.P.O. and at the time of joining they offer me salary annexture having
Basic + HRA + FBP(Flexible banifit plan)+ Employer P.F.+Employer ESI= Assured Salary.
+ Annual Incentive + Gratuity = CTC
So My question is, Is it a good practice to show Employer P.F. & E.S.I. in the Assured Salary?
because when the actual salary comes in my hand it was by deducting my P.F. + Emplyoer P.F. + E.S.I.
Second What is FBP (Flexible Benifit Plan.)
Tell me something about D.A.
Please read the article CTC Vs. BTC in the following link.