Ctc Breakup - Xls Download - Appointment Letters

To
All seniors,
I am working as a HR Executive. Our company wants to mention CTC break up in appointment letter. One of my senior gave me a break up which mentioned below:-
Gross Salary- 21,000 pm
Annual CTC- 2,52,000
Bonus- 12600 (yearly paid basic)
Basic- 12600
HRA- 3675
Other Allowances- 3675
I am unable to find how he calculae HRA & OA...
Please explain me in detail.

Hi Rani,
Generally, when we do the salary bifurcation, we keep in mind the following % which helps in minimizing the TDS
Basic - 40% of Gross
HRA - 30% of Basic
Conveyance - 800 per month (As per the Law)
Other Allowance - Rest of the amount (This amount can be used fully or partially as Business related expenses (Fringe Benefits) to avoid the huge Taxes)
Thanks,

Gross - 500000
Basic - 40%*500000 = 200000
HRA - 30%*200000 = 60000
Conveyance - 800*12 = 9600
Other Allow = 230400
Hope this is clear now

Dear Mirza
Which law is restricting the Conveyance allowance as only Rs.800?
Many companies are paying more than that. (Even I am getting more).
Please clarify about the restriction on conveyance allowance.

Hi Bhaskar,
No one stopping to go beyond but you will be able to get the tax excemption only for 9600 per annum
Hope this clarifies

Hi,
Attaching the format of ctc break up for your ref and na.
Tax savings will have to be kept in mind while arranging the various salary heads.
Thanks and regards
Bijay

Dear Mirza,
Niter compulsory Rs. 800 per month nor mention in any Law.
Between Office to Resident Income Tax Exempted maximum up to Rs. 800.00 per Month. No proof Required.
Thanks,
Regards,
J.N.Modi

Hi,
The OA is nothing but the balance amount.The HRA is 12% of the basic and depends on the location/company. The other name of OA is special allowance. SPA is taxable, HRA you can claim benefit by producing rent agreements and receipt. Any more doubts contact me.
Venkatesh.P
9976105916

Venkatesh,
Where did you read that HRA is 12% of basics?? HRA is 50% of basics for metro cities and 40% of basics in non-metro cities.
What you MUST know about HRA

Hi Sanjeev,
Under income tax act Medical Allowance is max 1250-/month. (15000-/year) and Conveyance Allowance is 800-/month ( 9600-/year).