Understanding Salary Breakdown: Which Parts Are Taxable and What Are the Limits?

Hi,

Could someone please explain to me what the taxable and non-taxable components are in the salary? My company provides a fixed salary to employees, with tax deductions being the only deduction made. The components include:

1. Basic
2. HRA
3. Transport Allowance
4. Medical (Reimbursement) of Rs. 1200

I would like to know which of these items are taxable and also the taxation limits, etc.

Thanks & Regards,
Arushi

Hi Arushi,

The Component Basic, HRA (Partly), and transport Allowance, if not in the exempted limit, are taxable. HRA (50% of Basic in metropolitan, and 40% in other areas)/actual rent, whichever is less, is tax-exempt. Transport Allowance is exempted to Rs. 9,600 annually. Medical Reimbursement is exempted to Rs. 15,000 annually.

Thanks. Regards, Dhoop

There are some queries related to components of salary, and they are:

Components of Salary Paid Monthly

1. Basic → 15000
2. HRA → 6000
3. Conveyance → 800
4. Medical → 1250
5. LTA → 1250
6. Special Allowance → 8479

Total → 32799

So the above total is the monthly salary. My question is, what would be my take-home pay salary for the above components after tax deduction from the above components? What is special allowance, and what are the components of special allowance?

Is LTA paid on a demand basis, or is it paid as part of the monthly salary in hand? The same for LTA and special allowance.

Difference Between Gross Salary and CTC

The main thing is, what is the main difference between gross salary and CTC? Does it mean incentives are included in CTC?

Thank you in advance :)

Hi,

As per the salary structure you have mentioned above, the components Basic, HRA, Conveyance, and special allowance will be paid on a monthly basis as part of the monthly salary. Medical benefits will be provided monthly only after submitting the medical bills; otherwise, it will be paid to you at the end of the financial year after the deduction of tax. For LTA, you may need to submit the travel bills to get the amount reimbursed to you.

Regards,
GKY