Hi Folks,
Could any of you clarify my doubts on the following:
- What should be the basic % in a CTC?
- HRA should be at what % of Basic?
- DA should be at what % of Basic?
- HRA should be at what % of Basic?
- CCA should be at what % of Basic?
- Gratuity %
- Superannuation %
- Is leave encashment taxable? If so, at what %?
- What is the process of tax deduction and what are its limits in every account?
Kindly clarify my doubts.
With Regards,
R. Sudhakar
From India
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7Could any of you clarify my doubts on the following:
- What should be the basic % in a CTC?
- HRA should be at what % of Basic?
- DA should be at what % of Basic?
- HRA should be at what % of Basic?
- CCA should be at what % of Basic?
- Gratuity %
- Superannuation %
- Is leave encashment taxable? If so, at what %?
- What is the process of tax deduction and what are its limits in every account?
Kindly clarify my doubts.
With Regards,
R. Sudhakar
From India
Acknowledge(0)Amend(0)
Hi Sudhakar,
The compensation structure may vary from company to company and industry to industry due to the type of skill requirements, demand-supply scenarios, and industry-specific norms (sometimes set by quasi-legal boards).
But very generally, you could follow this:
Basic: 30 - 35% of CTC
HRA: 50% of Basic
DA: Regulated by Govt. notifications (nominal amounts)
CCA: Is normally a filler on negotiated salary (put the balance amount in this). Otherwise, 30% of CTC
Gratuity: Is statutory (consider 4.81%)
Superannuation: 15% - 27% of basic (27% if there is no PF)
Leave Encashment: Taxable under the provision of IT Act.
Tax deduction is based on various things like HRA claim (least of the 3 conditions under the IT Act - could also be non-taxable if claimed properly), investments done by employee, attraction of 80C/CCA, (basic, CCA fully taxed based on IT slabs), etc. Please refer to the IT Act (direct taxes) or your Finance department for more details.
The above compensation structure can be tweaked or more components added based on the company's requirements. That needs a discussion.
Hope the information helps.
Rahul
09968270580
Hi Folks,
Could any of you clarify my doubts on the following:
What should be the basic % in a CTC?
HRA should be at what % of Basic?
DA should be at what % of Basic?
CCA should be at what % of Basic?
Gratuity %?
Superannuation %?
Is leave encashment taxable, if so at what %?
And what is the process of tax deduction, and what are its limits in every account?
Kindly clarify my doubts.
With Regards,
R. Sudhakar
From India, New Delhi
Acknowledge(0)Amend(0)
The compensation structure may vary from company to company and industry to industry due to the type of skill requirements, demand-supply scenarios, and industry-specific norms (sometimes set by quasi-legal boards).
But very generally, you could follow this:
Basic: 30 - 35% of CTC
HRA: 50% of Basic
DA: Regulated by Govt. notifications (nominal amounts)
CCA: Is normally a filler on negotiated salary (put the balance amount in this). Otherwise, 30% of CTC
Gratuity: Is statutory (consider 4.81%)
Superannuation: 15% - 27% of basic (27% if there is no PF)
Leave Encashment: Taxable under the provision of IT Act.
Tax deduction is based on various things like HRA claim (least of the 3 conditions under the IT Act - could also be non-taxable if claimed properly), investments done by employee, attraction of 80C/CCA, (basic, CCA fully taxed based on IT slabs), etc. Please refer to the IT Act (direct taxes) or your Finance department for more details.
The above compensation structure can be tweaked or more components added based on the company's requirements. That needs a discussion.
Hope the information helps.
Rahul
09968270580
Hi Folks,
Could any of you clarify my doubts on the following:
What should be the basic % in a CTC?
HRA should be at what % of Basic?
DA should be at what % of Basic?
CCA should be at what % of Basic?
Gratuity %?
Superannuation %?
Is leave encashment taxable, if so at what %?
And what is the process of tax deduction, and what are its limits in every account?
Kindly clarify my doubts.
With Regards,
R. Sudhakar
From India, New Delhi
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