How Can We Redefine Our CTC Structure to Ease Employee Tax Burden? Seeking Your Insights

Dear HR Fraternity,

Greetings of the day. I am in the process of redefining my CTC structure. The current CTC structure doesn't have a tax-saving component, and the tax burden on the employee is high due to this structure. For the benefit of our employees, I have decided to redefine it by including tax-saving components to reduce the current tax burden.

I am attaching a sample CTC structure for 5 Lacs containing both the current and proposed structure.

I request valuable inputs and feedback from the HR fraternity. The overall intention of this exercise is to help our employees save tax in a legitimate way and enjoy an increased net take-home salary.

Hello, Mr. Rahman,

Greetings!

I have gone through the structure, and some updates are required in a couple of salary heads considering taxation. Taxation of perquisites is a very vast subject with a lot of details; it is not possible to explain everything here.

To assist you, I have enclosed a booklet released by the Income Tax Department of India for your kind perusal. Please go through the booklet.

You may add other components like a monthly Rs. 1250/- medical allowance and Rs. 1600/- Conveyance allowance additions to these Sodexo coupons to avoid tax.