Dear Rolly
All legal implications are decided with respect to the Basic Salary of an Employee. At the same time point of time this part of the salary is pretty relaxing for an employee. At the present time most of the Allowances are also taxable. now you have to think that which allowances you are going to introduce in the salary break-up.
I'm afraid that you would not be able to achieve the purpose which you are trying to achieve, because:
by decreasing the Basic salary of your Employees they'll become de-motivated (company will shift the burden of Tax from itself to the Employees)
Although allowances are satisfactory but not like Basic salary
I would suggest that if you want to restructure the salary structure apply it to the new comers, not on the existing one, this will create a fuss in your org.
Asif Naqvi[/u][/i]