Hi, How can one make a salary structure more tax friendly? What are the perks that can be included to decrease the burden of tax on the employees? Kindly help. Smita Mumbai
From India, Mumbai
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From India, Mumbai
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Hi Smita,
The contents of the salary break up are as below. You can prepare it at your own convenience. HRA would be 50% or 60% of basic.
- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowance
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum = 12 * Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Getting more than this will be covered under Mediclaim or it depends on company policy.
Ex-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also called as CTC. Apart from this, Food coupons, Holiday package, and Furnishing items are included in their CTC.
I hope this clarifies your queries to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
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508The contents of the salary break up are as below. You can prepare it at your own convenience. HRA would be 50% or 60% of basic.
- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowance
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum = 12 * Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Getting more than this will be covered under Mediclaim or it depends on company policy.
Ex-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also called as CTC. Apart from this, Food coupons, Holiday package, and Furnishing items are included in their CTC.
I hope this clarifies your queries to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
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SALARY CALCULATOR & INCOME TAX.zip
Tax structure.xls