Salary Break Up Which Is Tax Deductable

give me detail of allowance which can include in salary break up which is tax deductable or Tax Rebate
regards
roopal

Hi Roopal,

Yes you have asked a very relevant question, but can you give us a CTC figure of which you have to prepare a break-up.

Anyways the Basic would be approx 40 - 50% of gross, and 40 - 60 % of that would be HRA,Conveyance Allowance is fixed-800/- and its exempted from Tax. Educational Allowance that is approx 450 per children and rstricted upto 2 only. Medical allowance is 1250/- which is also exempted from tax. LTA that you may put in gross or better leave it from gross that you may pay on actual. Other allowance is the remaining amount to complete the Gross salary, i.e

Other Allowance = Gross - (Basic+HRA+CA+Medical+Edu All)

So can say Gross Salary = Basic+HRA+CA+Med+Edu+Other Allowance

Whereas out of this only two components may be deducted, one is PF which would be 12% of Basic and ESI 1.75% of gross if only Gross is below 10,000/-.

Regarding TDS, with this financial budget the ceiling is been increased from 1,00000/- to 1,10,000/-.

Above I have explained only regarding the Gross/Month. Regarding CTC you have to do some more exercise-

First Calculate Gross / Annum = 12*Gross/Month

then add Ex-Gratia or Bonus in lum sum it will now become AFGC (Annual Fixed Gross Cost)

Then Add PF contribution and ESI 4.75 % of Gross if applicable from the employer side per annum then it come your CTC or ATC.

It means CTC = Gross/Annum+EX-Gratia+PF & ESI contribution

If any other benefits are being provided from company side then you add also to conclude your CTC.

Hope it will be now very much clear with you, if get any query then feel free to revert.

Regards,

Amit Seth.

Hi Amit,
The details given by you are very clear and understandable. Thanks !!
If you could also help us know, the formula for calculating income tax then it would be really great.
Regards,
Jyoti

Dear All..
Thanks a lot for your compliments.. :lol: :lol: :lol:
sorry Jyoti i am not sure about the formula that you have asked..
Regards,
Amit Seth.

Dear Amit
Let us assume emloyee X's salary details are as follows:
basic:20000
HRA:10000
Conveyance:800
Children education allowance:200
special allowance:19000
Benefits:
P.F.:780
Medical:1000
Total cost to company:6,21,360.
Kindly let me know all tax deductable items & for the above how much tax will be deductable?Another thing to mention is WHAT IF X IS LIVING IN OWN HOUSE.how does HR treat this case?
Rgds,
RGS.

Dear RGS,
Out of this structure most of the components comes under Tax slabs..
Only HRA, Conveyance, Educational Allowance and PF are exempted from taxes upto the specified limit..
Better include more Flexible components to save taxes..
Regards,
Amit Seth.