Hi all, I have joined a new company in Bangalore where they have offered to pay me a gross CTC of 5 lakh 50 thousand per annum. As it's not a big organization, they have given me the option to let them know how to design the salary structure. Can someone help me design a salary structure by which I can stay safe from falling under the 20% tax slab as the CTC will be over 5 lakhs? Please note that the PF deduction will not be applicable as the company is yet to enroll for PF due to low employee strength.
Salary Structure Design for Tax Efficiency
As my position is Operation Manager, they have offered to include variables like fuel component, food expense, mobile expense, periodicals/magazine subscription, broadband/data card expense, etc., like my previous company (which will be deductible unless bills are submitted) to reduce the taxation. Kindly advise.
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Salary Structure Design for Tax Efficiency
As my position is Operation Manager, they have offered to include variables like fuel component, food expense, mobile expense, periodicals/magazine subscription, broadband/data card expense, etc., like my previous company (which will be deductible unless bills are submitted) to reduce the taxation. Kindly advise.
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Salary Structure Without PF and ESI
Assuming there is no PF and ESI, the following should be your structure:
1) Transport Allowance: ₹19,200 annually or ₹1,600 per month.
2) If you have children, ₹100 per month per child (maximum 2 children) can be children's education allowance.
3) House Rent Allowance (HRA) Calculation
HRA should be the least of the following:
a) Actual HRA received
b) 40% of Salary (50% if the house is situated in Mumbai, Calcutta, Delhi, or Madras)
c) Rent paid minus 10% of salary
* Salary = Basic + DA (if part of retirement benefit) + Turnover-based Commission
Note:
i. Fully taxable if HRA is received by an employee living in their own house or not paying any rent.
ii. It is mandatory for the employee to report the PAN of the landlord to the employer if rent paid is more than ₹1,00,000 [Circular No. 08/2013 dated 10th October 2013].
The other portion is taxable. See this for all details Indian Labour Laws & Shram Suvidha Simplified.
From India, Kolkata
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180Assuming there is no PF and ESI, the following should be your structure:
1) Transport Allowance: ₹19,200 annually or ₹1,600 per month.
2) If you have children, ₹100 per month per child (maximum 2 children) can be children's education allowance.
3) House Rent Allowance (HRA) Calculation
HRA should be the least of the following:
a) Actual HRA received
b) 40% of Salary (50% if the house is situated in Mumbai, Calcutta, Delhi, or Madras)
c) Rent paid minus 10% of salary
* Salary = Basic + DA (if part of retirement benefit) + Turnover-based Commission
Note:
i. Fully taxable if HRA is received by an employee living in their own house or not paying any rent.
ii. It is mandatory for the employee to report the PAN of the landlord to the employer if rent paid is more than ₹1,00,000 [Circular No. 08/2013 dated 10th October 2013].
The other portion is taxable. See this for all details Indian Labour Laws & Shram Suvidha Simplified.
From India, Kolkata
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Salary less tax - CTC.xls