Is My Salary Bifurcation Correct? Seeking Advice on Tax Implications and Allowances

I want to confirm with you, seniors, if this is the right bifurcation of salary. I have created it keeping the old posts of Cite HR in mind.

Salary Bifurcation Details

Gross = 20,000/-
Basic (50% of Gross) = 10,000/-
HRA (60% of Basic) = 6,000/-
(Amount left: 4,000/-)
Conveyance (40% of Amount Left) = 1,600/-
Personal Phone Allowance (25% of Amount Left) = 1,000/-
Special Allowance (35% of Amount Left) = 1,400/-

If PF and PT are not applicable and if conveyance and anything is taxable after some limit, I saw in one post here that it is taxable after some limit.

Please go through the web links below that are posted. I have also attached a sample salary sheet format. Enter the data as you wish and find what you are looking for.

- [Salary Breakup - 25000 per month](https://www.citehr.com/295416-salary-breakup-25000-per-month.html)
- [Salary Breakup with less tax deduction](https://www.citehr.com/45366-salary-breakup-less-tax-deduction.html)

Thank you.

Gross = 20,000/-
Basic (60% of Gross) = 12,000/-
HRA (50% of Basic) = 6,000/-
Conveyance = 750/-
Medical Allowance = 1,250/-

Here, you are not going to pay PF since the basic is more than 6,500. Additionally, you are exempted from conveyance for up to 800/month and also exempted from medical allowance for up to Rs. 1,250.

Thank you.

I recently joined a new firm as an HR Executive, but there are no HR policies in place. I want to establish HR policies.

PF Registration Requirement

I want to know if PF registration is necessary in my organization where a total of 20 employees are working.

Salary Slip Format

I also need the format for salary slips.

Regards,
Ketan Gadani

Special Allowance Taxability

Special allowance is entirely taxable. It was a misnomer in the past. Delete such heads altogether.

I also want to know the same thing: if 20 employees are working in the company, is it necessary to deduct PF?

Payroll consists of all the salary components like Basic, DA, HRA, Conveyance, Medical Allowance, etc. The salary is calculated based on the number of days you are present. There will be statutory deductions like ESI, PF, PT, and other deductions such as TDS, loans, etc. The payroll sheet shows the employee's gross salary, additional income like incentives, bonuses, deductions, and their net pay.

Visit the following link for a sample payroll excel sheet: https://www.citehr.com/329663-salary...ml#post1510353

Regards.

I want to confirm with you, seniors, whether this is the right bifurcation of salary. I have made it while keeping the old posts of Cite HR in mind.

Salary Bifurcation Details

Gross = 20,000/-
Basic (50% of Gross) = 10,000/-
HRA (50% of Basic in metro cities, 40% in other cities) = 6,000/- (amount left: 4,000/-)
Conveyance (40% of amount left, max 800/-) = 1,600/-
Medical Allowance (12,500/- INR per month, non-taxable)
Special Allowance (35% of amount left) = 1,400/-

If PF and PT are not applicable, is conveyance taxable after a certain limit? I saw in a post here that it becomes taxable after some threshold.

Regards

Preeti008, why do you want to create separate heads such as personal phone allowance and special allowance, both of which are entirely taxable?

Dear Preeti/Kavya & All,

Answer to Your Query for Pay Bifurcation at Gross Rs.20,000/- per Month:

- Basic @ 60% = Rs.12,500/-
- HRA @ 40% of basic = Rs.5,000/-
- Children Education Allowance @ Rs.100/- per child up to 2 children, i.e., Rs.200/-
- Conveyance Allowance = Rs.800/- per month
- Medical Reimbursement = Rs.1,250/-
- Mobile Reimbursement = Rs.250/-

Regards.

In response to your query for the salary bifurcation of Rs. 20,000 per month:

Salary Bifurcation Details

- Basic = Rs. 12,500
- HRA @ 40% = Rs. 5,000
- Conveyance allowance = Rs. 800
- Children Education Allowance for up to 2 children @ Rs. 100 each
- Medical Reimbursement = Rs. 1,250
- Mobile Reimbursement = Rs. 250

If you need any further clarification, please feel free to reach out.

Best regards

I want to confirm with you about the comment from your end. Is the special allowance fully taxable? Are you sure?

60% or more of your gross salary should normally exceed the minimum wages for that profession/designation.

Thank you.

My scale pay is ₹16,500/-
Basic 40% is ₹6,600/-
HRA 40% of basic is ₹2,640/-
DA 40% of basic is ₹2,640/-
Medical allowance is ₹1,250/-
CCA is ₹825/-
Other allowances total ₹2,545/-

Is that okay?

I have a doubt about what is exempted from PF, HRA, or DA?

Yes, it is okay. They have calculated it as 56% of your gross salary for Basic + DA. Only HRA is exempted. PF is calculated on Basic + DA (12%).

Hi Mani, thank you for your suggestions.

As per your options:
1) When we use this option, our Page Setup will be disturbed, and it will take up a large space.
2) Same comment.

Note: In some organizations like the Income Tax Department, we can input data and retrieve the same data even after a month using the date option that we have entered the data with.

For example, take the issue of Salary Breakup. We enter data for January, and it calculates as per the details provided by us. When we save it and then enter data for February, the Salary details from last month get deleted.

How can we differentiate between January and February when we cannot see the details of January?

Regards,
Mani

Please suggest how I should prepare the PF & ESI breakup details. Additionally, do we need any specific format related to this preparation?