Salary Breakdown Tax Query: How Much Tax Do I Owe on My Monthly Pay?

Dear all,

I wanted to inquire whether the salary breakdown provided below, which is paid to an individual each month, is taxable or not? If the answer is yes, then how much tax does the person need to pay?

- BASIC: 15000
- DA: 5000
- HRA: 5000
- CONVEYANCE: 1600
- MEDICAL: 1500
- TRANSPORT: 1900
- SPECIAL: 2000

Thank you.

I recommend the following while deciding on the salary components:

a) Please keep the Basic Salary fixed at a percentage like 40%, 45%, or 50% as per your choice. The Basic percentage should be uniform for all employees. In the above case, the basic salary is Rs 15,000/- for a gross salary of Rs 32,000/-. I think that the percentage is not appropriate.

b) You are paying Rs 1,600/- as a conveyance allowance whereas Rs 1,900/- as a transport allowance. How are they different? Can you please explain?

c) You have reserved Rs 2,000/- as a special allowance. However, will you pay this special allowance to each employee? If yes, then it would be wrong to do so. Special allowances are paid to employees who possess exceptional skills. When others fail to perform a particular job even after training, there are certain individuals who do this with ease. To reward their special ability, they are paid a special allowance. The percentage of persons receiving a special allowance should be minimal or even negligible.

Thanks,
Dinesh Divekar

Basics are fully taxable. Conveyance more than 1600/- per month is taxable. Medical expenses exceeding 2084 are taxable. HRA at 40% in Non-metro cities and 50% in metro cities of basic is exempt from tax. Other or special allowances are fully taxable.

Thank you.

As per your salary structure, the gross payable is 30,100 per month (transport is different, don't consider that, as I think it is an expense that is given) and 3.61L per annum. So, whoever (salaried people) receives income above 2.5L is liable to pay tax, subject to the conditions below.

TDS calculation

PT per annum - 2400
Conveyance - 19200
HRA exemption (calculate by HRA online calculator or follow HRA rules) - A
Under 80C, 80D exemption - B
Home loan interest - C
Total D = 2400 + 19200 + A + B + C

Gross Income = 3.61L
Taxable income = Gross - Total D = Example 483101

Follow slab rates

0-2.5L - Nil
2.5L-5L - 5% (Taxable income - 250000)
5L-10L - Rs 12500 + 20% (Taxable income - 500000)

Then TDS = 5% (483101 - 250000) = 11655 per annum = 971 per month rounded off to 900.

Depending on the date of joining, you should take the gross income per annum and divide by 12 per month. For example, if an employee joins in May, then 30100*11 will be gross. TDS = 11655/11.

Hope this helps you to some extent.

Dear Radhika Papisetty Mam,

Thank you for your invaluable contribution on the topic. Could you please clarify the following line and explain how you calculated the taxable income as 483101? I am eagerly awaiting your prompt clarification and appreciate your assistance in advance.

Taxable income: Gross - Total D = Example 483101

Biswadeep Dhar
Kolkata