Is My Salary Breakdown Correct? Seeking Clarity on HRA and Other Components

We are paying a basic salary of 2000/- along with 5000 HRA, 5000 Conv., and an additional 15000/- as HRA. Could you please confirm if my understanding is correct?

Thank you.

HRA Calculation Clarification

HRA should be 40% or 50% of the basic salary. The above calculations are incorrect.

Understanding HRA and Tax Exemption

40% or 50% of the basic salary for HRA is for tax exemption purposes. The percentage is not compulsory.

Regards,
Pon, Chennai

You can pay any amount under any head, but ultimately, the employee has to pay income tax on amounts over and above the exemption limits.

We are paid a basic of 2000/- + 5000 HRA, + 5000 Conv. + and an additional 15000/- HRA. Am I correct or wrong?

Important Note on Salary Structure

PLEASE NOTE: YOUR BASIC MUST BE AS PER THE MINIMUM WAGES APPLICABLE TO YOUR INDUSTRY. FURTHERMORE, DA SHOULD BE CALCULATED IN A SIMILAR MANNER. AFTER OBTAINING THESE TWO FIGURES, YOU CAN BIFURCATE THE BALANCE SALARY PORTION AS YOU WISH. IN SOME STATES, HRA IS ALSO APPLICABLE WITH CERTAIN CONDITIONS. HENCE, WHILE SETTING UP THE SALARY STRUCTURE, YOU NEED TO OBTAIN PROPER LEGAL INFORMATION OR SEEK PROFESSIONAL CONSULTATION.

Regards,
[Phone Number Removed For Privacy Reasons]
Pune, Maharashtra

The components for the salary bifurcation should be as follows:

Basic Salary
- 50%-60% of the gross salary (but not less than the minimum wages of the state)

HRA
- 40%-50% of the basic salary

Conveyance Allowance
- Rs. 800/-; more than that should be taxable

Medical Allowance
- Rs. 1250/-; more than that should be taxable

Other Allowances
- The rest should be put under this category.

Thanks & Regards,
Sumit Kumar Saxena