Understanding Gross Income: Are Deductions Like PF and ESI Part of It?

Understanding Gross Income Components

What are the components of gross income? Are deductions like PF, ESI, PT, and IT taken from an employee's salary considered part of the gross income? Is the 8.33% bonus calculated based on the basic salary or the gross income?

Please provide answers to these questions as soon as possible.

Regards,
Shweta Singh

Yes, you are correct, but IT would always be an external and variable factor that we never consider in gross salary. Rest all the factors are included, like your bonus, PT, PF, and ESIC.

Bonus would be calculated on gross salary. For example, if your gross salary is 10,000/-, then dividing it by 12 would result in the figure of 8.33%.

Regards,
Ritesh Sinha
HR Manager
Vijay Sales

The bonus is calculated based on Basic + DA only.

Regards

PF & Bonus are calculated on Basic & DA. ESI & PT are calculated on Gross. IT is calculated on Basic + DA and part of HRA, and even some other components, but it is not so easy. You need time to practice the same.

Dear All, Thanks for sharing this information. Can any one of you send me the salary breakup? It will be very useful for me. Actually, my organization is an NGO, and here employees' salaries are under the tax slab, so there is no need for the deduction of income tax (IT). I want to know about IT deduction, which components of the salary are taken into consideration for "IT DEDUCTION."

Awaiting your valuable replies.

Regards,
Shweta Singh

Now there is no tax until ₹2,00,000/- for males and females (excluding Senior Citizens). The tax applicable chart is attached for your reference. Tax is applicable to the total earnings (all components of the salary) of an employee, not just the gross salary.

Regards,