Salary Statement Confusion: Can You Help Me Understand What Went Wrong?

Hi, I prepared a salary statement for a Public Limited Company, and one of the persons in accounts said that the bifurcation of the amount I had done is wrong. Can anyone suggest what problems might be present in issuing this statement and clarify my doubt about whether it is okay or not?

Regards.

Your accounts are correct as you had bifurcated the salary wrongly. The correct breakdown should be as follows:

You should include in the monthly CTC the Company Contribution to Provident Fund, Superannuation, and LTA. However, I would not suggest making a notional provision for gratuity as part of CTC since the same is applicable only when the employee fulfills the conditions as mentioned in the Payment of Gratuity Act, 1972.

Suggestion on HRA

One more suggestion: HRA ideally should not exceed 50% of Basic Pay, as HRA up to 50% of Basic is permissible for tax exemption under the Income Tax Act, 1961 for employees staying in metro cities.

Please review and make the necessary adjustments accordingly.

Thank you.
Regards.

As per your statement, you should take a medical reimbursement of ₹1250 and remove the mobile reimbursement. For that, you need to provide bills. The basic salary should not be less than the minimum wage act. Please study the minimum wage act. However, to the best of my knowledge, for any industry, the basic salary is not less than ₹4200.

Regarding HRA, correct it to be 50% or 60% of the basic salary. You should exclude the professional allowance.

Regards.