Our company has only a couple of people who earn a basic of below 21000 month. Our auditor said that we can pay even the junior employees a basic more than 21000 and adjust the rest of the amount as special allowance or HRA. Can this be implemented? One employee monthly salary is 21600, can i pay the entire thing as basic to him.
24th August 2018 From India
Hello there,
The basic should be in limit of 30 - 60% of gross salary; most of the companies can go for average of 40-50% of gross as basic; so the rest of percentage as you said they can put in HRA or any other components.
remember what ever you mention in basic, that is taxable, in your case if you put the entire in basic, employee is not eligible to go for tax free.
best advice is put basic as 40% and the rest in diff components according to tax slab.
24th August 2018 From India, Hyderabad
Try to see that the break-up of salaries are done taking into consideration the basic areas like Basic Salary, HRA, Conveyance and the balance as Special allowances. While the basic may hover around 40-50% of the salary, HRA ought to be 50% of the basic with the balance as Special Allowances after Conveyance allowance depending on the place of work. Basic salary plays important role especially while calculating Gratuity and/or PF.
Auditor might have informed that the basic salary can be more than 21k but I am sure he/she might not have told you to put the whole salary as basic.
Thanks and Regards
27th August 2018 From India, Hyderabad
Usually the concerned state govt.under Labour dept will issue what. Is bp and VDA...etc
So verify in google
...state MWrates.
You can download.
And another thing as far as my knowledge the total worker's entire salary undoubtedly comes for income tax applicability not only basic pay .pls
12th October 2018 From India, Nellore
Minimum wagese Jan 19to July 19
30th January 2019 From India, Nagpur
Can anyone please give me a formula for calculating a Basic and HRA of the salary?
12th March 2019 From India, Mumbai
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