Understanding CTC Basics: Is There a Legal Minimum or Maximum for the Basic Amount?

I am very confused about the basic amount of CTC. Is there any law regarding the basic amount? How to fix the basic amount - is there a minimum or maximum boundary for the basic amount? On what basis should the amount of basic be fixed? Please help me.

Understanding Cost to the Company (CTC)

This is a total "Cost to the Company" for the engagement of an employee. The cost includes basic salary, house rent allowance, conveyance allowance, management contribution on ESI & PF, and annual payment of medical allowance, leave travel allowances, superannuation payable to LIC if any, and in some cases, gratuity payable after a continuous period of 5 years.

In the present scenario, it is called a "Pay Basket" (the total cost figure the company could incur due to that employment) during perks deciding time, after the selection process is over. Some multinational companies give the chance to decide how much to be in each head for the newly recruited employees to consider.

Normally, the basic pay is decided to be around 55 to 60 percent.

Generally, it is 40% to 50% of CTC (Cost to Company). Statutory components like PF, bonus, gratuity, and other benefits like LTA are calculated based on this amount. Hence, an increase or decrease in basic salary may impact the CTC of an employee.