Salary components are typically calculated based on the Gross Cost to Company (CTC), not the net take-home pay. Here's a simplified breakdown:
1. Basic Salary: This is a fixed component and forms the largest portion of the CTC. It is usually 40-50% of the CTC.
2. House Rent Allowance (HRA): This is usually 40-50% of the basic salary. It is higher (50%) if you live in a metro city.
3. Leave Travel Allowance (LTA): This is the amount paid by the company for your travel expenses when you are on leave. The amount varies from company to company.
4. Medical Allowance: This is the amount paid for your medical expenses. It is usually a fixed amount and is tax-free up to INR 15,000 per annum.
5. Conveyance Allowance: This is the amount paid for your daily commute expenses. It is tax-free up to INR 1,600 per month.
6. Special Allowance: This is a balancing figure after allocating the above components. It varies from person to person and company to company.
7. Provident Fund (PF): This is 12% of the basic salary and is deducted from your salary every month. Both the employee and employer contribute to the PF.
Remember, the net take-home pay is what you receive after all deductions like taxes and provident fund contributions are made from the Gross CTC. The Gross CTC includes all the components mentioned above plus any other benefits provided by the company.