Salary Slip Components: How Can They Help Reduce Tax for Both Employers and Employees?

Please advise on the salary slip components that can reduce tax for both the employer and employee.

Thank you.

From an employer's perspective, most employee benefits are calculated based on the basic salary. Therefore, the focus should be on the basic salary.

For employees, you can include reimbursement items such as broadband, mobile, fuel, leave travel allowance, and Sodexo vouchers. Additionally, HRA and medical allowance are provided by default. These reimbursement items are non-taxable, and employees should submit appropriate bills for the stated amounts on a yearly basis.

Suggested Salary Components

- Basic
- HRA
- Medical Allowance
- Special Allowance
- Fuel
- Telephone
- LTA
- Broadband Allowance
- Sodexo Vouchers

Regards, Thiyagu

Hi Thiyagu,

Thank you so much.

Can I make use of the above-mentioned salary structure for both freshers and senior-level employees? Please advise.

It would be a great help for me if the structure provided with the salary limits.

You are advised to consult a tax consultant or chartered accountant to provide you with the best advice to avoid tax liabilities for both the employer and the employee.