Can I Set Basic Salary to Minimum Wages and Increase HRA for a 72000 Salary?

Hi,

I have recently joined a networking company. Here, I have to prepare the salary sheet for the month of April. I would like to know if it is possible to set the basic salary according to the minimum wages and HRA higher than this, if the employee is receiving a salary of 72000/- per month.

Akhaya Sr. HR Executive

Hi,

You should avoid this type of scenario; however, each city has its own house rent allowance exemption. Hence, it may not be possible for an employee to save tax more than the prescribed limit. You can use a flexi benefit plan, medical benefits, LTA, meal vouchers, etc., to reduce the tax burden. Tax experts, please suggest.

Regards,
Niraj Sharma

Hi Ganesh,

I would like to inquire about a small query regarding the salary structure. Is it possible to change the amount specified in the basic salary? For example, in the previous scenario, if the basic salary was 1.5 L, can it be reduced to 90K for this fiscal year? Please guide.

Hello, Ganesh here.

In case the increment given is 20%, the person avails LTA in the package. Is the 20% increment on the whole package, or is it separately after deducting LTA?

Hi,

This is Sakthi. I have a doubt regarding the new PF rules.

Consider a person who is earning a gross salary of 40,000 with a basic pay of 15,000. If his NCP (non-contributory pay) is 15 days, the earned gross amount is approximately 20,000, and the basic pay is 7,500. Please clarify for which amount we have to pay PF, whether for the earned gross or the minimum wage ceiling of Rs. 15,000.

If we calculate based on the minimum wage of 15,000, it will impact their corresponding bonus calculation. Please provide guidance.