Understanding Personal Pay and Arears: Can You Help Clarify These HR Terms?

Dear Sir,

I am working as an Officer in Personnel & HR. I am also responsible for making payments for our marketing branches in India, which have a separate salary structure including Personal Pay. Could you please explain what Personal Pay is? Additionally, I am unsure about the term "Arear" - could you clarify its meaning as well?

Starting from 1st April, the Gujarat Government is imposing additional charges related to Professional Tax. I would like to understand how to calculate this increase for the increment of Professional Tax.

Thank you,
Bhardwaj.

Personal pay is a component of the total salary payable. Different companies have different approaches to salary structure. Personal pay is like dearness allowance, which is always paid as a percentage of the basic salary. Some companies restrict personal pay to those who are working in the office and may also be called 'special pay'.

Arrears accrue when the salary is not paid during a month due to any reason. It also accrues when pay is revised with retrospective effect from a previous period. For example, if the DA is revised with effect from 1st Jan 2008, then the DA difference due for Jan, Feb, and Mar will be in arrears, which has to be paid on a fixed date.

The profession tax structure applicable to your state has to be referred to. There may be a slab, and incomes/salaries coming under each slab will attract profession tax as shown against each slab. Normally, it is deducted from the salary half-yearly. It can also be deducted monthly if the total amount to be deducted half-yearly is known, but the payment will be made half-yearly only.

Regards,

Madhu.T.K

I want to know whether this Personal Pay will be considered as salary for calculating deduction for HRA u/s 10(13A) or not?

Corrected Version:

I want to know whether this Personal Pay will be considered as salary for calculating deductions for HRA under section 10(13A) or not.