Understanding Salary Breakdown: How Does a CTC of Rs. 27,000 Result in Rs. 25,000 Take-Home?

Can anybody provide the salary breakup of a CTC of Rs. 27,000, where the take-home salary will be approximately Rs. 25,000? Please help.

It's impossible. There are some compulsory deductions like PF, P.Tax, IT, etc., which cannot result in a net salary of 25,000.

Ideal Salary Breakup

What should be the ideal breakup? The CTC can be any amount, but the take-home should be approximately $24,500, considering the compulsory deductions.

Salary Breakup for CTC of Rs. 27,000

- Basic: 12,000
- HRA: 6,000
- Conveyance: 800
- Medical Reimbursement: 1,250
- Special Allowance: 6,170
- Gross Salary: 26,220
- Employer's PF Contribution: 780
- CTC: 27,000
- Professional Tax: 200
- On-Hand Salary: 25,240

This is the only way out wherein it fits your requirement. The employee has to produce medical bills and, subject to investment and house rent applicability, to avoid TDS deduction.

Salary Breakup for CTC of Rs. 27,000

It's possible. Even though there are some compulsory deductions like PF, P.Tax, IT, etc., which can make the net salary up to Rs. 25,000, an employee has to produce Medical Bills, Investments, and House Rent to avoid TDS deduction.

- Basic: Rs. 12,000
- HRA: Rs. 7,200
- Conveyance: Rs. 1,000
- Medical Reimbursement: Rs. 1,000
- Special Allowance: Rs. 6,000
- Gross Salary: Rs. 27,200
- Employer's PF Contribution: Rs. 780
- CTC: Rs. 27,200
- Professional Tax: Rs. 200
- On-Hand Salary: Rs. 26,420

Ensure proper paragraph formatting and line breaks for better readability.

It's possible. Even though there are some compulsory deductions like PF, P. Tax, IT, etc., the net salary can be up to 25,000 if the employee produces medical bills, investments, and house rent to avoid TDS deduction.

- Basic: 12,000
- HRA: 7,200
- Conveyance: 1,000
- Medical Reimbursement: 1,000
- Special Allowance: 6,000
- Gross Salary: 27,200
- Employer's PF Contribution: 780
- CTC: 28,000
- Professional Tax: 200
- On-Hand Salary: 26,420

Here, the CTC is Rs. 28,000/- instead of Rs. 27,000/-, and the On-Hand would be Rs. 26,220/-

There seems to be a misconception regarding the PF applicability. Allow me to clarify as follows:

1) Even if you have more than 20 employees, you have to register with the PF authorities but not necessarily contribute to the PF (both employee & employer), if all the employees draw Basic+DA above Rs. 6500/-.

2) If you are registered with the PF Commissioner and any new employee joins, there will be 2 scenarios:

a) If he is already holding a PF account with his previous employer, he will have to be compulsorily covered under PF.

b) If he was not holding a PF account in his previous organization, then, he need not be covered under PF.

Salary Structure

A) (Covered under PF)

- Basic: 15000 (Assuming you are deducting the PF on the minimum amount of 6500/- only for all employees. If you are deducting the PF on actual Basic, then the Basic should be as low as possible, but greater than Rs. 6500/-)
- HRA: 7500 (As per the IT Rule for HRA exemption)
- Conveyance: 800 (As per the IT Rule for Conveyance exemption)
- Medical Reimbursement: 1250 (As per the IT Rule for Medical Expenses exemption)
- Special Allowance: 1670
- PF: 780 (employer contribution)

Monthly Gross Salary: Rs. 27000/-

Deductions: PT: 200/300 (In Maharashtra. It may be different in each state)

Monthly Net Salary: 26020/- (Deduction of employee PF Contribution & PT) minus any TDS liability depending on the employee's Tax Saving Investments

B) (Not Covered under PF)

- Basic: 15000
- HRA: 7500 (As per the IT Rule for HRA exemption)
- Conveyance: 800 (As per the IT Rule for Conveyance exemption)
- Medical Reimbursement: 1250 (As per the IT Rule for Medical Expenses exemption)
- Special Allowance: 2450

Monthly Gross Salary: Rs. 27000/-

Deductions: PT: 200/300 (In Maharashtra. It may be different in each state)

Monthly Net Salary: 26800/- (Deduction of PT) minus any TDS liability depending on the employee's Tax Saving Investments

You may check the local liability as per the requirement of the state in which you operate but you can go by the above broader structures.

The HRA, Conveyance & Medical Reimbursement will help the employee minimize the IT liability. In case of Annual gross, you may add LTA facility & Performance Bonus.

Trust, this is of help to you.

Regards,
Nilesh

Please clarify the reason you are asking for the breakup. The way it has been presented suggests a lack of clarity behind this. If you are working in an organization and require a breakdown, you should have provided us with the deductions that are applicable in your organization. Are you seeking this information to create your own salary slip?

I guess it must be like this...

Gross Salary Breakdown

- Gross Salary: ₹27,000/-
- Basic (50%): ₹13,500
- HRA (20%): ₹5,400/-
- Others (30%): ₹8,100/-

Deductions

- EPF (12% on Basic): ₹1,620
- Professional Tax (for ₹15,000 and above): ₹200
- Total Deduction: ₹1,820/-

Therefore, ₹27,000 - ₹1,820 = ₹25,180/-

Hello, everyone,

Could anyone here please let me know the salary structure for CTC of 18500? I would really appreciate a quick response.