How Do I Calculate Employee Income Tax with These Salary Components? Seeking Advice!

Hello, Everyone,

I am seeking your help for the calculation of tax on the salary of employees. The salary components of my company are as follows:

A.
1. Basic
2. HRA = Basic/2
3. Medical
4. Conveyance

B. Reimbursements (Monthly)
1. Conveyance
2. Mobile

C. Variable Pay
1. Performance Incentive
2. Retention Bonus

Please let me know how to calculate the income tax deduction. I am waiting for your valuable suggestions. Feel free to ask if the provided information is inadequate.

Thanks,
Sangeeta

1. Basic taxable

2. HRA - 50% of basic in Metros or 40% of basic in Non-metros - (actual rent paid minus 10% of your basic) is exempted from tax.

3. Medical - up to ₹15,000/- per annum on production of bills is exempted.

4. Conveyance - ₹9,600/- per annum is exempted from tax.

Reimbursements: Conveyance and mobile expenses are non-taxable.

Variable pay: Performance incentives and retention bonuses are taxable.

Regards, R. Ponraj

Good Morning Ponraj,

Thank you for your reply. I am providing you with an example detailing the salary. Please provide the taxable amount.

1. Basic=15200
2. HRA=7600
3. Medical=1250
4. Conveyance=800

B. Reimbursements (Monthly)
1. Conveyance=500
2. Mobile=250

C. Variable Pay
1. Performance Incentive (Yearly)=99760
2. Retention Bonus (Yearly)=30720

Total (Monthly)=25600, CTC=437680

Please enter your salary components in the attached spreadsheet. You will then know the tax.

Regards,
R. Ponraj