Understanding Your Salary Offer: How Much Will You Actually Take Home in India?

This is a great forum. Lots of information. Just amazing.

I got an offer from a company that looks like this:

With the monthly gross salary Rs 93056.

I have several questions on this:

1) What would be my NET PAY?

2) What will be deposited in my bank account monthly?

3) LTA seems to be way too high, especially when I cannot claim anything other than fares. Is LTA part of the money deposited monthly, or should I claim it at the end of the year? If I have to claim this yearly, does this mean if I were to leave the job before that I would not get anything?

4) If I don't claim the LTA, does the company keep it or do they tax it and give the rest of the unclaimed money after a year?

5) In India, does the tax get deducted monthly from the take-home pay and the rest gets deposited in the bank account?

6) Is the medical allowance part of the amount deposited monthly, or do I need to produce receipts to even claim it?

7) The company said I am eligible after 3 years for Gratuity, but my CTC includes this. Does this mean it is a waste if I leave the company before 3 years?

Sorry, I know there are so many questions. I will be extremely grateful for your replies.

Thanks.

Your adjusted salary after HRA exemption (Rs. 172,504) and Conveyance allowance (Rs. 9,600) amounts to Rs. 862,088. There will be further deduction from this figure as Professional tax of Rs. 2,400, making the final amount Rs. 859,688.

This calculation assumes that you are staying at a rented accommodation with a house rent of Rs. 19,167 and are fully utilizing the Medical benefits.

Now, consider investments that can be made up to a maximum of Rs. 100,000 to avail tax deductions. The Net Taxable income comes to nearly Rs. 759,688. The Annual Income tax amounts to Rs. 177,907, with an additional Surcharge of Rs. 3,558. Therefore, the Net Tax payable will be Rs. 181,465.

The rest of the amount is entirely yours, dear, and that's a significant sum of money indeed. This calculation should provide you with some guidance on managing your take-home pay after allocating sufficient funds to investments and stocks for tax savings.

I hope this information proves helpful.

Regards,
Sudip

Further to my earlier message:

- LTA: You will be eligible for LTA only when you complete one full year of service for this organization. The amount will be deposited at the end of the 2nd year. You may claim the amount and get tax benefits by producing travel documents every 2 block years and not every year. Bad - isn't it? If you don't claim the LTA in 2 block years, then that will be considered as taxable income.

- Medical allowance: This is typically the OPD charges for you and your immediate family inclusive of parents. The max allowed is Rs. 15,000. You need to produce medical bills with the name of the patient and doctor periodically to get the reimbursement.

- Gratuity: Normally companies give Gratuity only once the employee completes 5 years of service. The amount will be calculated based on the latest Basic salary. If you leave earlier than that, then zero.

Regards,
Sudip