HI FRIENDS,
The importance of friendly salary package is seen now especially after the introduction of Fringe Benefit Tax.
All those employers who are interested to make available friendly salary package for their employees should prepare special salary package based on tax planning theme especially in the context of Fringe Benefit Tax payable by the employer.
In the first place, the HR friendly modules in the present scenario for employees and directors should cover the theme of
(1) Think and then ink the salary package of an employee
(2) Scrap superannuation fund contributions
(3) Pass on FBT to employees based on CTC concept
(4) Tailor-made different proposals.
The following guidelines will help every corporate taxpayer plan salary and perquisite packages for its employees;
A - Salary Module for Junior Employees .
For all junior employees, the salary and perquisites module should be very simple and easy to implement.
2. Except transport allowance, just add all payments to salary income. Do not give medical reimbursements – let it be added with salary or grant theme medical allowance so as to save FBT.
3. Pay zero FBT in respect of payments to junior employees and thus let 'gross salary' be taxed in their hands – still most of them will not pay any income-tax because their taxable income will be below Rs.1 to 1.35 lakhs (after tax deduction under section 80C).
B – Salary Module for Middle Level Executives
The theme: Mix and match FBT
1. Instead of making payment of 'salary', the total emoluments can be bifurcated so as to suffer a little tax by the employee on perquisites but very less FBT.
2. Consider the following in drafting this module:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• .LTA AS PER LAW.
(C- Salary Module for Senior Level Executives
1. The theme: A little more pain to bring lower perquisite taxation and increase FBT payout which may be considered in CTC
2. Consider the following:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• Reimbursements of food expenses in club/hotel
• HRA OR RENT FREE ACCOMODATION
• LTA AS PER LAW.
• UNIFORM ALLOWANCE
• REIMBURSEMENT OF CAR EXPENSES OR CONVEYANCE ALLOW
BY APPLYING THESE U CAN WORKOUT THE BREAKUPS AT DIFFERENT LEVELS
KATYANA
The importance of friendly salary package is seen now especially after the introduction of Fringe Benefit Tax.
All those employers who are interested to make available friendly salary package for their employees should prepare special salary package based on tax planning theme especially in the context of Fringe Benefit Tax payable by the employer.
In the first place, the HR friendly modules in the present scenario for employees and directors should cover the theme of
(1) Think and then ink the salary package of an employee
(2) Scrap superannuation fund contributions
(3) Pass on FBT to employees based on CTC concept
(4) Tailor-made different proposals.
The following guidelines will help every corporate taxpayer plan salary and perquisite packages for its employees;
A - Salary Module for Junior Employees .
For all junior employees, the salary and perquisites module should be very simple and easy to implement.
2. Except transport allowance, just add all payments to salary income. Do not give medical reimbursements – let it be added with salary or grant theme medical allowance so as to save FBT.
3. Pay zero FBT in respect of payments to junior employees and thus let 'gross salary' be taxed in their hands – still most of them will not pay any income-tax because their taxable income will be below Rs.1 to 1.35 lakhs (after tax deduction under section 80C).
B – Salary Module for Middle Level Executives
The theme: Mix and match FBT
1. Instead of making payment of 'salary', the total emoluments can be bifurcated so as to suffer a little tax by the employee on perquisites but very less FBT.
2. Consider the following in drafting this module:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• .LTA AS PER LAW.
(C- Salary Module for Senior Level Executives
1. The theme: A little more pain to bring lower perquisite taxation and increase FBT payout which may be considered in CTC
2. Consider the following:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• Reimbursements of food expenses in club/hotel
• HRA OR RENT FREE ACCOMODATION
• LTA AS PER LAW.
• UNIFORM ALLOWANCE
• REIMBURSEMENT OF CAR EXPENSES OR CONVEYANCE ALLOW
BY APPLYING THESE U CAN WORKOUT THE BREAKUPS AT DIFFERENT LEVELS
KATYANA