I am working as a HR Executive. Our company wants to mention CTC break up in appointment letter. One of my senior gave me a break up which mentioned below:-
Gross Salary- 21,000 pm
Annual CTC- 2,52,000
Bonus- 12600 (yearly paid basic)
Other Allowances- 3675
I am unable to find how he calculae HRA & OA...
Please explain me in detail.
From India, Jaipur
Generally, when we do the salary bifurcation, we keep in mind the following % which helps in minimizing the TDS
Basic - 40% of Gross
HRA - 30% of Basic
Conveyance - 800 per month (As per the Law)
Other Allowance - Rest of the amount (This amount can be used fully or partially as Business related expenses (Fringe Benefits) to avoid the huge Taxes)
From Saudi Arabia, Jiddah
Which law is restricting the Conveyance allowance as only Rs.800?
Many companies are paying more than that. (Even I am getting more).
Please clarify about the restriction on conveyance allowance.
Dear Mirza, Niter compulsory Rs. 800 per month nor mention in any Law. Between Office to Resident Income Tax Exempted maximum up to Rs. 800.00 per Month. No proof Required. Thanks, Regards, J.N.Modi
From India, New Delhi
The OA is nothing but the balance amount.The HRA is 12% of the basic and depends on the location/company. The other name of OA is special allowance. SPA is taxable, HRA you can claim benefit by producing rent agreements and receipt. Any more doubts contact me.
From Sri Lanka, Colombo
Hi Sanjeev, Under income tax act Medical Allowance is max 1250-/month. (15000-/year) and Conveyance Allowance is 800-/month ( 9600-/year).
From India, Gurgaon
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