Salary Breakdown Help: How Much of My 25,000 Monthly Salary Is Taxable?

Please suggest a salary breakdown for a monthly salary of 25000/-. After calculating all the components, could you also let me know the amount that will still be taxable? Thank you.

Hi Shilpi,

The contents of the salary breakup are as follows. You can prepare it according to your own preferences. HRA should be 40 to 60% of the basic salary.

- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per Month
- Gross Per Month = Sum of all the above
- Gross Per Annum = 12 * Gross/Month
- PF Contribution = 12% of Basic/Annum
- ESI Contribution = 4.75% of Gross/Annum
- Medical = The mediclaim facility is provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Anything exceeding this will be covered under Mediclaim, or it depends on company policy.
- Ex-Gratia/Bonus = A fixed bonus amount
- Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
- Annual Total Cost = AFGC + PF + ESIC
- Annual total cost is also referred to as CTC.

I hope this information helps you prepare the necessary documents on your end.

Regards,
Amit Seth.

Thank you very much. I would like to know if the city compensation allowance I receive while working in Indore is taxable, or if there is a possibility of getting an exemption from tax on this allowance.

Hi Amit,

I have seen some really good suggestions in some old posts that you have given to people regarding their salary breakups. Can you please help me figure out a breakup for a salary where the company has just given the total fixed sum as Rs. 100,000/- per month?

Please help me with some inputs on what all components should be included in the breakup to maximize the monthly take-home and minimize the tax liability.

Here are a few details about the company: it's a small company with only 5 employees in India, so I am not sure if they are bound to take care of PF, professional tax, Gratuity, Superannuation, etc., or not. In either case, what percentages should be assigned to BASIC, HRA, Medical allowance, etc., to minimize the taxes.

Would appreciate any help at the earliest possible. Thanks!

Regards,
AM

Hi Amit,

Please let me know how we will decide basic salary. Is it any percentage of CTC? I can calculate all things on the basis of the basic salary. So please help me and give me your precious suggestion on how I should decide basic salary based on different salary breakups.

Thanks,
Shuchi

Hi Anshul,

For your reference, I have appended a salary calculator. It lists out the components that should be part of the salary considering that the company is not covered for PF, ESI, etc. All you need to do is enter the Annual Salary in cell B7. To reduce the tax liability, you can introduce reimbursements for telephone usage, vehicle running & maintenance, and Sodexo coupons. All of these are tax-free if bills are submitted for the specified amount.

If you need any clarifications, please feel free to ask.

What about PF and ESI deductions not mentioned in the attachment? Can you kindly provide the same for it.

Hi,

Your salary breakup was of great help, but if you could send it with PF and other deductions, as well as showing the take-home amount, it would be of great help.

MP

I have gone through the discussion; it's really helpful to me too. However, I have a small doubt. Does the slab of a 100,000 salary also come under PF and ESI contributions? If so, please tell me what the calculation percentage is.

Regards,
Hema

Hi,

Attached is the salary breakup for 20500. Please note that if the work location is Mumbai, there is a change in HRA and PT.