Minimum Wages and Salary Structure in West Bengal and Uttarakhand
In respect of employees in West Bengal, you have to follow the minimum wages for banking (NBFC?) establishments published by West Bengal. For others in the offices of Uttarakhand, you have to fix the salary according to the Uttarakhand notification.
There will be two parts: one is Basic wages, and the other is the variable Dearness Allowance in the notifications. If you don't pay any DA (VDA), then you have to club both the basic and DA, and that should be the basic salary. If the salary offered exceeds this amount, you can pay it under any heads like HRA, Conveyance, etc. This is legally okay.
If you take the whole amount as salary and then break it up into components like basic salary (50%), HRA (40%), and Special allowance (10%), then the employee would still be happy to receive the same salary. But the employer will face a question when the EPF authorities ask why you are contributing PF only on Basic salary alone. Or after five years of service, if an employee leaves, he may ask for gratuity, and you may calculate it on basic salary, but he refuses to take it, saying where is it written in the Payment of Gratuity Act that gratuity is payable only on basic salary? Then you are stuck, right? It will be a question of law to interpret the meaning of basic salary.
It is true that as long as you are paying a salary above the minimum wages, you can pay it under different heads, and there is no need to include an element called variable dearness allowance. But the issue arises only when a legal battle is initiated, in which the employee questions your decision of not compensating for the cost of living increase.
Simply put, an employee receives a salary increment for two reasons: to reward performance and to compensate for the increase in the cost of living. The former is reflected in the form of an increase in the basic salary, and the latter in the form of DA.
Therefore, if you want your establishment to be legally perfect, please refer to the state's minimum wages notification and then make a decision.