Curious About Indian Labor Laws: How Should Basic Salary Be Determined in CTC?

Is there any Indian Labor Act that specifies how to design the salary structure? One of my employees asked me the question, "On which basis do you decide the basic salary % of gross CTC?" So, I just want to know if there is any specification in the law that specifies what should be the % of CTC as basic salary?

Hello Kartik,

As per my opinion, there are no specific acts available for designing any salary structure. The only act available is the Minimum Wages Act, which defines the minimum wage for employees.

The main purpose of a salary structure is to provide maximum tax benefits. You can utilize various tax-saving salary components to ensure maximum tax benefits.

Regards,
Ashish