Hi all,
Require your help asap.
I have received a new offer letter from a new company. My previous CTC was 11 lacs (fixed was 9,34,000 and rest was variable) and my new CTC is 13,70,000/- (out of which fixed is 12, 40,000 and variable is 1,30,000/-) But the new offer letter features a lesser Basic Pay than my previous company. Previous Basic was 39,000/- and present new offer letter basic pay is 36,225/-. Also they have added 4,72,386/- Rs as Residuary Choice Pay. ie 39,366/- per month. The HR refuses to give me a fix figure of take home salary also, saying that it all depends on you tax investments. I really dont get this. Firstly, what is residuary choice pay? is it taxable and how much? Also, should I ask for a higher basic pay or is it fine...will it affect my future prospects? Please help asap since I need to reply them in a couple of days. Thanks in advance guys!!..Peace Out!
16th October 2016 From India, Thane
Dear Mr.Thinking Cap,
Residuary Choice Pay is generally for services provided which generate revenue ,even long after the service was provided-say as in film industry, music industry etc.
Basic pay/ breakdown of CTC should be got clarified before joining.There is no fixed % for the components of CTC but norms are generally -Basic -50%, HRA based on type of city--A, B, C etc.
17th October 2016 From India, Delhi
Normally, residuary choice is what you opt out of the basket of benefits they have.
They will be able to tell you the take home pay only after that.
For example, they may have a option of Superannuation contribution or cash in lieu thereof.
If you opt for benefit, they will contribute that amount to the superannuation fund and you will get that accumulation on retirement / resignation as per Company policy. It will reduce your take home pay. If you opt for cash, it will be part of your take home pay and you wont get the superannuation accumulation at the time of retirement / resignation.
Further, these choices clubbed with your tax saving investment will affect your tax working. Thus, they will be able to tell you the final take home pay after your choices.
However, based upon what you have written, it is a good offer and there seems to be no problem.
Every Company has its own system of salary break-up. You should not worry even if the basic is low as the overall package is higher.
18th October 2016 From India, New Delhi
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