How Can We Consider Basic + DA & HRA? On What Basis ?

Dear All, Greetings for the day !! Happy Diwali !
I would like to start a discussion on Salary Details / Breakup -
on what basis we consider Basic + DA as 30% - 50% of Gross and HRA as 30-40% of Basic + DA
is there any Law to calculate the same ?
for eg., we calculate PF as 12% on Basic + DA and ESI as 6.50% (1.75% & 4.75%). this calculation will be considered as per Employee State Insurance Act 1948 and
Employee Provident Fund and Miscellaneous Provisions Act 1952.
Like the above mentioned ESI & PF calculation, do we have any act to calculate Basic + DA & HRA .
Kindly discuss the same or give the appropriate information

Hello Aditya,
To the best of my knowledge, there is is no law that determines the proportion between Basic and DA. Different states have minimum wages which ascertain the Basic Wage and changes therein linked to inflation. This can form the basis of determining Basic and DA relationship.
Some States also have Basic and DA, wherein Basic remains constant over a period of time whereas DA keeps changing libked to inflation.
As regards HRA %, Income Tax act lays provisions for HRA taxation which in turn form HRA equation as % of Basic + DA . %'s defer from city category.
It is better to consult a professional CA while determining salary structures.
Trust this helps.
regards,
Rajesh