Understanding Allowances: Can They Exceed Basic Pay and How Are They Calculated?

Dear All, I request you to kindly suggest/advise me on the following:

1. Can Other Allowances be higher than the Basic Pay? If yes, then is there a cap to it, or a certain calculation to derive the Other Allowances amount?

2. Is there a standard calculation for HRA, Medical Allowances, and Transportation Allowances based on the Basic Pay?

Your suggestions would be highly appreciated.

Regards

Yes, other allowances can be higher than the basic pay.

HRA Calculation

HRA is 50% of the basic pay for metros and 40% for non-metros.

Medical Assistance

Medical assistance is Rs. 1250/- per month, which is tax-free.

Transport Allowance

Transport allowance is Rs. 800/- per month and is tax-free. Alternatively, you can claim fuel and maintenance charges for tax exemption if you own 2/4 wheelers in lieu of the transport allowance.

Please inform me whether other special allowances payable to the workers will be considered for Provident Fund.