In My Offer Letter My Basic Is High While In The Recent Appraisal Letter The Basic Was Quoted Less Than My Offer Letter. Does This Affect.

Hi all,
Am working in a company for the past one year. Recently got my hike. In my offer letter the basic and hra was high while in my recent appraisal the basic and hra was quoted very less. Does this impact ?
Kindly give your suggestions.
Thank you
Kripa

Dear Friend ,
Even though your Appointment letter & other Statutory Deductions eg.P.F.,,Sevice Tax calculation must be on Old Basic Only .
On safer condition politely pl take give in writing /Communicate to HR Dept.for mistake,to avoid future problem .
Regards ,
Y.R.Shirke

Yes. It would impact your savings and taxes. Management may save employer's contribution in EPF. You will get better take home now.
It will also effect Gratuity, bonus, Leave encashment, EDLI insurance, etc.,
Section 12 in The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
12. Employer not to reduce wages, etc.—No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled under the terms of his employment, express or implied.

Kripa has not mentioned whether there is over all hike in gross salary or not. If yes how & how much? As a result of revision in salary, with or without hike, there is a possibility of upward revision in Basic and lowering the DA. This is normal when part of the existing DA is merged with basic pay, especially whenever revision takes place linking the DA with CPI/WPI. Whereas lowering the Basic will surely reflect/impacts in increments, EPF, Gratuity, Bonus and all other perks which are linked to basic pay. However if there is an overall increase in the gross salary it will not affect the take home salary. In short it's not a good practice lowering the basic/HRA of employees.

Please furnish your previous Salary Structure together with deductions & present salary Structure with deductions together with your Designation & Type of industry you are Employed for comments.

Employer can not reduce basic salary as it impacts PF deductions & payment of gratuity, but, if you are ready to fight on these grounds with your HR/employer it will be restored. However, increase in the salary does not matter in this case.