Dear Peers,
As I have very big doubt in HRA workings in CTC.
There is no procedure/Law says about HRA workings. Since We all will go to new PF & ESI slap. In that PF calculation HRA is exemted. But there is no law says that HRA should be this much % in Gross salary. If the company can decide to fix the HRA themselves on the basis of Locality where the company situated that will not accepted by PF inspectors rather we can go with Income Tax act, It says 40% of basic is HRA that also not agreed by PF officials even it also a Local LAW.
So seniors please guide me, How we can resolve this issue? Share your valuable points.........
Regards, Sakthi
From India, Mumbai
16As I have very big doubt in HRA workings in CTC.
There is no procedure/Law says about HRA workings. Since We all will go to new PF & ESI slap. In that PF calculation HRA is exemted. But there is no law says that HRA should be this much % in Gross salary. If the company can decide to fix the HRA themselves on the basis of Locality where the company situated that will not accepted by PF inspectors rather we can go with Income Tax act, It says 40% of basic is HRA that also not agreed by PF officials even it also a Local LAW.
So seniors please guide me, How we can resolve this issue? Share your valuable points.........
Regards, Sakthi
From India, Mumbai
Hi Sakthi, As per my knowledge, for metro cities it is 50% (Delhi, Mumbai, Kolkata, chennai). Except these 4 cities, all the other places are applicabl with 40% of HRA.
From India, Delhi
From India, Delhi
Which is to auditable by PF officials at the time of inspection, so please share with legal provisions or examples or case studies or judgements........ I want to counter if anybody will ask Y should your HR is X%?????
From India, Mumbai
From India, Mumbai
Dear shakthi,
If your paying minimum wages to your workers just go with Basic + DA prescribed by the minimum wages act for the purpose of calculating PF, or and for the purpose of the ESIC you have to calculate on the gross payable. HRA payable does not matter in respect to the pf payable. only in the case of ESIC it includes..
Regards
Yogesha
From India, Bangalore
If your paying minimum wages to your workers just go with Basic + DA prescribed by the minimum wages act for the purpose of calculating PF, or and for the purpose of the ESIC you have to calculate on the gross payable. HRA payable does not matter in respect to the pf payable. only in the case of ESIC it includes..
Regards
Yogesha
From India, Bangalore
Mr.Yogesh, For PF calculation you must take all the components of salary execept HRA Judgement already given. ESI we can include HRA also. Sakthi
From India, Mumbai
From India, Mumbai
Dear Mr. Sakthi,
As per my knowledge Basic & DA should not be lesser than the minimum wages.
While making salary breakup, if the salary is much more than Minimum Wages then 60% of gross pay needs to be put in Basic & DA (it should not be lesser than Minimum Wages as per the Act). Balance pay can be divided as HRA, Conveyance etc. etc. in a ratio which generally feels good.
In such cases PF authorities cann't make some observation.
Are you paying PF for full basic & DA or restricted to Rs. 6500/- which is the present statutory limit ?
Please check it again.
With Regards,
Mohan Kumar
From India, Bangalore
As per my knowledge Basic & DA should not be lesser than the minimum wages.
While making salary breakup, if the salary is much more than Minimum Wages then 60% of gross pay needs to be put in Basic & DA (it should not be lesser than Minimum Wages as per the Act). Balance pay can be divided as HRA, Conveyance etc. etc. in a ratio which generally feels good.
In such cases PF authorities cann't make some observation.
Are you paying PF for full basic & DA or restricted to Rs. 6500/- which is the present statutory limit ?
Please check it again.
With Regards,
Mohan Kumar
From India, Bangalore
Where the Basic + DA not comes the present ceiling limit of Rs.6500/- then PF officials would take all the remaining components for PF calculation.That time only HRA is exempted. But we havn't put more % of HRA from gross......
Seniors.... Please share your deep views rather some basic level answers like ceiling of Rs.6500/- Basic + DA......... because this is basic think to calculate Pf everyone knows.......
From India, Mumbai
Seniors.... Please share your deep views rather some basic level answers like ceiling of Rs.6500/- Basic + DA......... because this is basic think to calculate Pf everyone knows.......
From India, Mumbai
As you told I am also not seen anywhere what should be the salary breakup and what percent you can give HRA.
For govt. employees as per the class of city (Metro city, A Class, B class etc. etc.) legally fixed different percentage of Basic as HRA.
Hence I feel that, while making salary breakup, if the salary is much more than Minimum Wages then 60% of gross pay can be put as Basic & DA (it should not be lesser than Minimum Wages, as per govt. notification), balance pay can be divided as HRA, Conveyance etc. etc. in a ratio which generally feels good or as per Govt. employees.
Please discuss !
Mohan Kumar
From India, Bangalore
For govt. employees as per the class of city (Metro city, A Class, B class etc. etc.) legally fixed different percentage of Basic as HRA.
Hence I feel that, while making salary breakup, if the salary is much more than Minimum Wages then 60% of gross pay can be put as Basic & DA (it should not be lesser than Minimum Wages, as per govt. notification), balance pay can be divided as HRA, Conveyance etc. etc. in a ratio which generally feels good or as per Govt. employees.
Please discuss !
Mohan Kumar
From India, Bangalore
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HRA-Unit 2.ppt
Gross Salary(1).xls
Reclassificatio n of towns for HRA for central govt employees 21.7.2015.pdf