Dear all, can anyone explain about special allowance? Special allowance is mentioned in my salary breakup. Is it compulsory to add special allowance with the basic salary for the calculation of PF?
Companies hire candidates based on a randomly agreed CTC, which is then arbitrarily bifurcated into certain components. Any amount that is left over is termed as special allowance. A corollary to this is:
If the special allowance is increased, the basic pay decreases. The implications of reduced Basic Pay on statutory benefits and deductions are immense and to the disadvantage of the employee.
This scenario does not occur in companies with a well-laid-out compensation strategy and process, where any special allowance is designated for a specific purpose. I hope others can appreciate the significance of the above.
In our company, we are paying a basic salary along with HRA, conveyance, medical, and special allowance. With a recent amendment, the special allowance also has to be deducted for PF. Please suggest what to do to avoid this.
I think that the latest judgment states that the special allowance should be considered for PF deduction. I am attaching the judgment copy for your reference and records.
Regards,
Alphonse
[Phone Number Removed For Privacy Reasons]
What allowances are offered to employees through a partnership firm?
I am currently employed in a partnership firm and am responsible for creating pay slips. I would appreciate your assistance in determining the types of allowances that should be included in the pay slips. In our firm, we do not deduct PF and ESI contributions; only TDS deductions are made.
I kindly request guidance on the new amendments that need to be considered.
Thank you all!
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