To all seniors,
I am working as an HR Executive. Our company wants to mention the CTC breakup in the appointment letter. One of my seniors gave me a breakup which is mentioned below:
CTC Breakup Details
- Gross Salary: ₹21,000 per month
- Annual CTC: ₹2,52,000
- Bonus: ₹12,600 (yearly paid basic)
- Basic: ₹12,600
- HRA: ₹3,675
- Other Allowances: ₹3,675
I am unable to understand how he calculated HRA and Other Allowances. Please explain to me in detail.
From India, Jaipur
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5I am working as an HR Executive. Our company wants to mention the CTC breakup in the appointment letter. One of my seniors gave me a breakup which is mentioned below:
CTC Breakup Details
- Gross Salary: ₹21,000 per month
- Annual CTC: ₹2,52,000
- Bonus: ₹12,600 (yearly paid basic)
- Basic: ₹12,600
- HRA: ₹3,675
- Other Allowances: ₹3,675
I am unable to understand how he calculated HRA and Other Allowances. Please explain to me in detail.
From India, Jaipur
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Hi Rani, Generally, when we do the salary bifurcation, we keep in mind the following percentages, which help in minimizing the TDS:
- Basic - 40% of Gross
- HRA - 30% of Basic
- Conveyance - $800 per month (As per the law)
- Other Allowance - Rest of the amount (This amount can be used fully or partially as business-related expenses (Fringe Benefits) to avoid the huge taxes).
Thanks,
From Saudi Arabia, Jiddah
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- Basic - 40% of Gross
- HRA - 30% of Basic
- Conveyance - $800 per month (As per the law)
- Other Allowance - Rest of the amount (This amount can be used fully or partially as business-related expenses (Fringe Benefits) to avoid the huge taxes).
Thanks,
From Saudi Arabia, Jiddah
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Gross - 500000 Basic - 40%*500000 = 200000 HRA - 30%*200000 = 60000 Conveyance - 800*12 = 9600 Other Allow = 230400 Hope this is clear now
From Saudi Arabia, Jiddah
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From Saudi Arabia, Jiddah
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Which law is restricting the Conveyance allowance to only Rs. 800? Many companies are paying more than that (even I am getting more). Please clarify about the restriction on conveyance allowance.
From India, Kumbakonam
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From India, Kumbakonam
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Hi, Attaching the format of ctc break up for your ref and na. Tax savings will have to be kept in mind while arranging the various salary heads. Thanks and regards Bijay
From India, Vadodara
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From India, Vadodara
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Hi,
The OA is nothing but the balance amount. The HRA is 12% of the basic and depends on the location/company. The other name for OA is a special allowance. SPA is taxable, and you can claim benefits for HRA by producing rent agreements and receipts.
If you have any more doubts, please contact me.
Regards,
Venkatesh.P
[Phone Number Removed For Privacy Reasons]
From Sri Lanka, Colombo
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The OA is nothing but the balance amount. The HRA is 12% of the basic and depends on the location/company. The other name for OA is a special allowance. SPA is taxable, and you can claim benefits for HRA by producing rent agreements and receipts.
If you have any more doubts, please contact me.
Regards,
Venkatesh.P
[Phone Number Removed For Privacy Reasons]
From Sri Lanka, Colombo
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Venkatesh,
Where did you read that HRA is 12% of basics? HRA is 50% of basics for metro cities and 40% of basics in non-metro cities.
What you MUST know about HRA
From India, Mumbai
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Where did you read that HRA is 12% of basics? HRA is 50% of basics for metro cities and 40% of basics in non-metro cities.
What you MUST know about HRA
From India, Mumbai
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Hi Sanjeev, Under income tax act Medical Allowance is max 1250-/month. (15000-/year) and Conveyance Allowance is 800-/month ( 9600-/year).
From India, Gurgaon
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From India, Gurgaon
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hi All, I found the salary byfurcation posted by Bijay is totally incorrect becoz there is no ESI deduction/contribution ,but as per rule upto Rs 15000 Gross Salary ESI is must .
From India, Jaipur
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From India, Jaipur
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Hi Sanjeev, the content was very useful. I had a good discussion with the finance management team today. However, there is a small correction - our finance team mentioned that the conveyance allowance should not exceed 9,600, and the medical allowance should not exceed 15,000. Please verify this information and confirm.
Thank you.
From India, Hyderabad
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Thank you.
From India, Hyderabad
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Conveyance Allowance Clarification
Conveyance Allowance cannot be 2,400/- INR. In this particular case, it can only be 800/- INR, and the remaining 1,600/- INR should be shown as Other Allowance.
Kindly note that a Conveyance Allowance of only 800/- INR per month (9,600/- INR per annum) is exempted under Income Tax. Any amount exceeding 800/- INR under this category will be taxable. For example, in this case, only 800/- INR will be exempted under Income Tax, and the remaining 1,600/- will be taxable. The company might have decided to allocate 1,500/- INR under the Medical Allowance category to ensure that amount is exempted under Income Tax.
From India, Mumbai
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Conveyance Allowance cannot be 2,400/- INR. In this particular case, it can only be 800/- INR, and the remaining 1,600/- INR should be shown as Other Allowance.
Kindly note that a Conveyance Allowance of only 800/- INR per month (9,600/- INR per annum) is exempted under Income Tax. Any amount exceeding 800/- INR under this category will be taxable. For example, in this case, only 800/- INR will be exempted under Income Tax, and the remaining 1,600/- will be taxable. The company might have decided to allocate 1,500/- INR under the Medical Allowance category to ensure that amount is exempted under Income Tax.
From India, Mumbai
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Hi, This is Mrunalini working as HR Officer ...have a query.. is workmen compensation and personal accident caculate in CTC. Please reply at the earliest ___________ Thanks & Regards,
From India, Pune
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From India, Pune
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Dear Mrunalini, If company have hire any insurance company than we can calculate workmen compensation and Personal accident in CTC Thanks, Regards, J.N.Modi
From India, New Delhi
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From India, New Delhi
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Hi Rani CTC Break up HRA-50% (Metro Cities ) on basic - 40 % (non- Metro ) on basic Conveyance - 800 per month
From India, Guntur
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From India, Guntur
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Mrunalini, personal accident cover can be mentioned in CTC, only in cases where it isnt a part of mandatory compliance.
From India, Delhi
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From India, Delhi
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Thank you for the above information. Please note that the Conveyance Allowance should not exceed ₹9,600 per annum, while the Medical Allowance should not exceed ₹15,000 per annum.
Regards,
Ashi Rana
From India, Solan
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Regards,
Ashi Rana
From India, Solan
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I am working in a Construction Company as an HR executive. I am receiving a take-home salary of 12,330 with a CTC package of 150,000. I require a salary breakup. Additionally, could you please explain the difference between Gross and CTC? How should Form 16 be calculated in the salary structure, and what is the significance of the BOCW Act in a construction company?
Please provide the necessary information.
Thank you,
Regards,
M. Santhosh Kumar
[Phone Number Removed For Privacy Reasons]
From India, Vijayawada
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Please provide the necessary information.
Thank you,
Regards,
M. Santhosh Kumar
[Phone Number Removed For Privacy Reasons]
From India, Vijayawada
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Hi every one can any one guide me in this if the salary of the employee is 17,500 then what will be the deduction for PF and ESI regards Nikithaa
From India, Tiruppur
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From India, Tiruppur
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Hi Sanjeev, I would like to add one more thing here. Basic should be should be higher then all other components. Regards, James
From India, New Delhi
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From India, New Delhi
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Gross Salary Breakup
The gross salary breakup is as follows:
- Basic: 7,500 (50% of Gross Salary)
- HRA: 3,000 (40% of Basic Salary)
- Medical Allowance: 1,250
- Conveyance Allowance: 800
- Special Allowance: 2,450 (Not D.A)
Thanks & Regards,
Laxman Dalavi
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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The gross salary breakup is as follows:
- Basic: 7,500 (50% of Gross Salary)
- HRA: 3,000 (40% of Basic Salary)
- Medical Allowance: 1,250
- Conveyance Allowance: 800
- Special Allowance: 2,450 (Not D.A)
Thanks & Regards,
Laxman Dalavi
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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Salary breakup format.xls