Whether the Bonus is to be added to the CTC of any employee and is to be mentioned in the appointment letter?

Hi,
The Statutory Bonus is paid to employees drawing Basic Salary below Rs. 10,000/- pm. For company's declaring Minimum Bonus of 8.33% ( Min. 8.33% , Max.- 20%, over this is exgratia) will have to pay 8.33% of Rs. 3500/- which comes to Rs. 292- pm. Employees whose Basic salary is below Rs. 3500/- need to pay 8.33% on the actual basic. However, this is subject to a minimum Bonus amount. Since this is an annual compulsory payment it can very well be taken as part of CTC as most of the Company's are paying Bonus.
Regards
Subrato:dry:

Hi,

Q :-1) I joined the company in 2005 wherein at present I am working. It was not mentioned in my appointment letter while joining, about including bonus in the CTC.

After the last year appraisals, a handsome amount (around 22k) was shown in my appraisal letter and revised CTC as " Performance allowance" which again was obtainable if I will work for the company for next 6 months.

Now at the time of this years' appraisal, my CTC is showing a deduction (i.e. an adjustment) in the performance allowance. i.e. 22k LESS bonus. which means the amount which was shown last year as performance allowance i.e. 22k, is not really gettable by me this year, as company has already shown an adjustment of the bonus out of it, (which bonus I had already received during last diwali)
How come a bonus given can be adjusted or deducted from any of the allowance I am liable to get ?

Q:-2) IF someone is provided with company accomodation on chargable basis, does HRA appears or applicable legally in the CTC ?

We have a practice of the following in our company :

• House is provided by company.
• HRA is not shown in the CTC.
• House valuation is shown as " perquisite " in the gross salary.
• ONLY the rent deducted from the salary is deducted from the house valuation.
• Still the Gross salary shows increase of 32 to 34K. (because of the perq valuation)
• Which increases my income tax

Now during this years' appraisals, HRA is shown in the CTC under different head, but at the same time, house rent is "DOUBLED".

plz guide me whether company accomodation / outside rented accomodation will be helpful for me to save money ?

regardz,
Chef

Hi Subodh,
When a company provides accommodation, it is treated as CLA (Company Leased Accommodation) which is treated as a Perquisite and Value of such perquisite has to be accounted for at the time of computation of your Income tax.
It gets calculated @15% of the Gross Earnings and Actual rent (CLA amount) paid. Least of the two is exempted from tax.
It is highly recommended to opt for HRA instead of CLA, as effectively it would be extremely costly as compared to HRA option. By availing HRA you would be able to save more tax as it allows you full exemption, subject to your rent ampount paid.
Pls find enclosed the CLA Calculation sheet. Hope this would help.
Regards

Hi Subodh,
Mukul has already answered your second query and he is absolutely right.
Now ragading your first query I am a bit confused about the question.
Please be informed that any amount once mentioned in the CTC has to be payed by the employer to the employee unless and untill there are clauses mentioned in the CTC letter or the appointment letter, hence check the same.
Once you CTC says that there is performance bouns involved the company has to pay that if there are no clauses saying the the bonus will be only payed in such and such conditions. But since you received the amount last year and this year the duduction was mentioned in your revised CTC you cant take any action against the company. You must have changed the company since such a practise is not a good sign.
Regards,
AJ

Dear AJ,
thankx for the reply.
i will refurnish my question for u. FYI, I have not changed the company, I am working since 2005 till date.
say in the last year's CTC Rs. 22000 was shown as Performance All. which has to be paid during this year.
There was a condition that If I will continue working for further six months I am liable to get those 22k. I am continued.
Now In this years' CTC, company has deducted / adjusted the last year's bonus which brings down my performance all amount by around 8400/-.
in other words, the bonus paid to me last year, has again recovered from my performance allowance, showing an adjustment in the performance all.
Am I not liable to get the whole amt. of Rs. 22000/ ?
regardz,
subodh

Hi Subodh,
Will this amount be paid to you once you leave the company.
Anyways have to inform you that its a very bad practise followed by your company.
Regards,
AJ

Hi All
I am yogesh. What are the total facilities and benefits under diffrent labour laws which are made available to Contract Workers? If possible, a compilation of the same in scintefic manner is required.

Dear All,
This is really an interesting & valuable discussion going on.
In my company one of the client is asking to distribute the Annual statutory bonus(Rs.3500/- ie. min. 8.33% ) as "Advance Bonus Payout" (Rs.292/-) in monthly salary components with a commitment to its monthly payout to employees as a part of Gross salary and its mention in monthly salary slips.
Your advice is requested whether this is feasible.
Regards,
Oindrila

Hi Oindrilla
Advance payment that too in monthly salary slip is not desirable It has to be paid after declaring the balance sheet
Legally, you can show as advance against bonus but still the chances of misinterpreatation arfe very high
It is not advised
Siva

Dear Subodh
What were the exact terminolgy used . In otherwords can you reproduce the exact clause on performace bonus.
We normally draft in such a way that it is not paybale in full
Unless we see the complete clause on this we can not say whether it is legally payable or not.
Siva