Basic salary is always calculated based on the base salary, i.e., (Gross - PF (Employer's contribution)) = Base Salary. Basic salary equals 40% of the Base Salary.
The most common method of calculating the salary structure is as follows:
- Rs. 1000.00 monthly salary
- 60% of the salary -- Basic + DA (60% Basic + 40% DA)
- 40% of the salary -- Allowances (HRA - 20% + CCA - 40% + Edu./Traveling/conveyance - 40%) -- earning part 'A'
- Deductions 'B' - 12% EPF (of basic + DA) + 1.75% ESIC (on gross salary/earning part 'A') + Prof. Tax + other deductions
- A - B = Net salary
The most common method for calculating basic salary is Gross - Provident Fund = Base Salary. Additionally, Basic = 40% of Base Salary. This method is typically used by every organization.
Please let me know if you need any further assistance.
Could you please email me a complete procedure and methodology of TDS on Salaries for both male and female? If possible, kindly send a soft copy (in Excel format) to me at "ajeetmx@hotmail.com".
Lots of love,
Amarjeet
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