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Hi, Pls help me out with best salary break up by which we can reduce down the TDS amount. shalini
Hi Shalini,
The contents of the salary break up may be as below, you can prepare it at the suitability of your own. 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 an employee 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.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.

Hi shalini,

Pl find below the breakup where u can save tax under these components:

Basic

HRA : upto 50% tax exempted in Metros. Other Cities 40 % & 30 % ( refere the Tax Rule book). provided he /she can produce the rent receipt

Conveyance Allow : 800 monthly tax exempted

Medical Allow : upto 1250 monthly tax exempted provided he /she can produce the medical bills

LTA : If a person claim ONCE in a 2 years block ( As per income tax TWICE in a 4 yrs block) provided he /she can produce the tickets

Food Allow : Sodexo coupans

Telephone/ Molibe Reimbursement : On bills Tax free

Driver salary : for high salaries people

Vehcle Maintainence : Producing Bills

Petrol : for high salaried people ; producing bills

News papers & Magzine Reimbursements : producing bills

If you break the salary into 2 parts like fixed salary ( from where the employee will get the salary into their account ) and Reimbursements, them they will more get benefits and save the TAX

Hope I have clarified your queries to a certain extent.

AMATYA

Hi
Thanx AMatya it was very useful info but i hv a few doubts.
1) What does high salaried ppl mean in case of driver salary, petrol reimbursement? Is there a certain amount and if yes what is that amount?
2)Arnt reimbursement a part of taxable salary?
3)Can a person get conveyance allowance and driver, vehicle maintenance & petrol reimbursement all at the same time? Coz purpose is same.
4)Are telephone bills, petrol, driver and vehicle maintenance bill amounts completely tax free? if not then to wat extent
Iknow too many questions but it wud b really nice if u cud answer.
Regards
Gunjan

reimbusment of expenses like telephone bill etc useful but also keep in your mind F.B.T. witch may be 5% to 50%
Hi..
Good information shared by Amatya..
Dear Gunjan,
High salaried people stands for those who is getting a high package and saving taxes are tough for them without these components...
Amount Reimbursement is also a part of taxable salary but they are exempted from taxes up to a certain level..
Telephone bills, petrol, driver and vehicle maintenance bill amounts completely tax free? if not then to what extent...
Telephone bills - 30,000/- per annum
Petrol - 72,000/- per annum
Driver salary - 60,000/- per annum
Vehicle maintenance - 25,000/- per annum..
Hope these are the sufficient information related with same..
Regards,
Amit Seth.

Hi...
Nice info from amit.. thx..
i would like to knw how all these are calculated for sales & marketing guys.. as they hav seperate conveyance, mobile reimbursements, etc..
kindly clarify the same amit..
Thanks,
Gowri

Thanks Gowri for appreciation..
For sales team also structure would remain almost same..
only thing conveyance would not be added in their salary structure unless it is fixed for a month.. Mobile reimbursement may be added as a fix amount per month, if it cross the fixed limit then after producing the bills of same with a special approval from his senior that can be reimbursed..
Hope it must have solved your query...
Regards,
Amit Seth.

Amit,
Thanks for your reply and yes it solved my query.. :)
wht if ur conveyance and mobile reimbursements are fixed... do we add the details of the same in their appt letter itself OR do u hav a seperate format in which we give all their reimbursement (includes mobile, conveyance, travel, etc) details..
Thanks,
Gowri

Dear Gowri, Welcome.. yes if its fixed then definitely you should show it in the salary break-up shown in Appointment letter. No need to add any other format for the same.. Regards, Amit Seth.

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