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I got a new offer in a mid level company. My current CTC is 4.2 and I got offer for 6 as CTC. But my basic salary is lower when compared with my current employer. Please suggest me whether I can accept this offer. I attached my current pay slip and the offered CTC. Please refer it.
My current employer monthly ctc
Basic : 17500
HRA: 7000
Conveyance: 1600
Medical Allowance: 1250
Special Allowance: 5600
Total Earnings: 32950.00
TDS: 0
EPF: 1800
ESI: 0
Profession Tax: 183
Total Deductions: 1983
Net Pay: 30967.00
================================================== ========
Offered CTC per month
Basic: 13000
HRA: 7800
Conveyance: 800
Medical Allowance: 1250
Special Allowance: 24726
Gross Salary: 47576
Statutory Benefits:
PF Employer Contribution: 1800
Gratuity: 624
Sub Total: 2424
CTC Total: 50000
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Your in hand salary is higher in the new offer. You should look at the total earnings (i.e. what you get in hand). The basic component will not matter.
The effect of both the same only except increase in salary.
The basic will be useful only to calculate the statutory calculation of PF , Bonus and Gratuity .
In your case the the P.F. is restricted to Rs.15000/- of basic in both the cases.
Gratuity is added as part of CTC - that is normally not added in CTC , since it is become eligible only if you have continuous service of 5 years in a company.
As per your salary if the basic + Da is more than Rs.15000/- , you are out of scope of the payment of bonus act ,
Hence, you can very well accept the offer even though the basic is less than previous employment.
The salary structure is classified into various categories for getting the tax exemption for HRA , (which is based on basic and DA ) , washing allowances are exempted, , calculate the statutory amounts like PF , Gratuity , etc., all are based on basic plus Dearness allowance only.
But lesser basic will give lesser tax benefit indirectly (ie) HRA exemption is based on 40 % of basic and DA or actual HRA received or Rent paid less 10 % of basic , which ever is less.
If your actual HRA is more , but your basic is less , then there is a possibility of lesser tax exemption.
CTC is classified into various components so a to do tax planning and help the employees to save tax on their income.
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