Hi Sara,
Welcome.. :)
Ad-hoc allowance ..yes it would be taxed in the hands of employee..
Remember one thing ..one cannot be punished twice!! therefore either Tax or FBT but not both..
Keeping low basic helps in reducing the company liability on two accounts viz PF deduction, gratuity etc and cash flow in event of resignation or otherwise on leave encashment..but may increase the tax liability in the hands of employee since it reduces contribution of PF to the tax shield of Rs 1 lac as well..so one needs to balance it out..
Sara, it would be difficult to elucidate the same here..
Why don't you email me your exact intentions & tentative break up of salary..my official email ID is [Login to view] would study the same and guide you..
Cheers,
Rajat
Welcome.. :)
Ad-hoc allowance ..yes it would be taxed in the hands of employee..
Remember one thing ..one cannot be punished twice!! therefore either Tax or FBT but not both..
Keeping low basic helps in reducing the company liability on two accounts viz PF deduction, gratuity etc and cash flow in event of resignation or otherwise on leave encashment..but may increase the tax liability in the hands of employee since it reduces contribution of PF to the tax shield of Rs 1 lac as well..so one needs to balance it out..
Sara, it would be difficult to elucidate the same here..
Why don't you email me your exact intentions & tentative break up of salary..my official email ID is [Login to view] would study the same and guide you..
Cheers,
Rajat