Is a 105% Special Allowance Increase a Red Flag in My Job Offer? Seeking Advice

I am in company A. I got a new offer from company B, where B offers me just a 5% hike in basic salary, whereas the special allowance sees a 105% increase. I somehow have a strong feeling this is a trap. However, my annual CTC overall has a good hike. Can someone advise how safe it is to accept this offer from B?

Firstly, I suggest checking out Company B from a credibility angle. If possible, try to meet some current and former employees to evaluate how they treat their employees and their basic nature—focusing on intangible factors. The insights gained from this exercise will lead to a more accurate response from your end.

In principle, you may be right in your feelings, but unless you mention 'why they would want to trap you,' at least from your perspective, it would be challenging to make a decision on this aspect.

All the best.

Regards,
TS

If the special allowance is higher than the basic salary, it is to your disadvantage because your gratuity will be affected, as the special allowance is considered as salary for the purpose of gratuity calculation. On the contrary, if it is called DA, then it will become part of the salary (basic plus DA), entitling you to have the gratuity calculated on a sum (salary) comprising of basic salary and DA.

In fact, the fixation of special allowance in such a huge proportion (higher than the basic salary) is an act of camouflage and subterfuge to circumvent laws and deprive the employee of his gratuity and other statutory benefits linked to the basic salary.

Regards, Senprithvib6