Salary Breakdown Dilemma: Should You Adjust Allowances and Opt for Vouchers?

Hi, can you please let me know if reducing the special allowance in the salary breakup and increasing the basic salary helps? Also, should one opt for the meal and gift vouchers?

Thanks in advance.

Regards,
ST

Increasing the Basic salary is advantageous for employees as it boosts their savings through increased contributions towards PF and Gratuity (if it is part of CTC). In a CTC regime, employers will not lose anything due to the increase in Basic as PF contributions from both sides are covered under CTC.

Regarding Sodexo or any other food coupons, the limit is ₹2700 per month in the FY 2011-12 as tax-free, but it will attract FBT on the employer's side.

FBT and Meal Vouchers

FBT was abolished long ago. The entire expense through meal vouchers is an allowable expense for the organization and tax-free for the employee.

Regards,
Gautam

Can someone help me? If the CTC is 3.2 lakh/annum, what will be the salary breakup and how much will be in hand? Please help.

Regards,
Zaiba
Sr. HR Executive