Hi, I have received an offer from a company for a CTC of 29.4 LPA. Below is the CTC breakup they provided, and I wanted to confirm if this breakup aligns with Indian regulations. Could someone please verify if this breakdown is accurate according to Indian rules and advise me on whether I should accept it or not as soon as possible?
Monthly and Annual Salary Breakdown
Basic Salary - 50%: 122,500 (Monthly), 1,470,000 (Annual)
HRA - 40%: 49,000 (Monthly), 588,000 (Annual)
LTA: 9,375 (Monthly), 112,500 (Annual)
PF contribution by employee - 12%: 14,700 (Monthly), 176,400 (Annual)
Special allowances: 49,425 (Monthly), 593,100 (Annual)
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Total Gross Salary: 245,000 (Monthly), 2,940,000 (Annual)
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Deductions
PF contribution by employee - 12%: 14,700 (Monthly), 176,400 (Annual)
Professional Tax (PT): 200 (Monthly), 2,400 (Annual)
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Net Salary (Gross - Total deductions): 230,100 (Monthly), 2,761,200 (Annual)
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Thanks in advance
From India, Hyderabad
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Monthly and Annual Salary Breakdown
Basic Salary - 50%: 122,500 (Monthly), 1,470,000 (Annual)
HRA - 40%: 49,000 (Monthly), 588,000 (Annual)
LTA: 9,375 (Monthly), 112,500 (Annual)
PF contribution by employee - 12%: 14,700 (Monthly), 176,400 (Annual)
Special allowances: 49,425 (Monthly), 593,100 (Annual)
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Total Gross Salary: 245,000 (Monthly), 2,940,000 (Annual)
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Deductions
PF contribution by employee - 12%: 14,700 (Monthly), 176,400 (Annual)
Professional Tax (PT): 200 (Monthly), 2,400 (Annual)
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Net Salary (Gross - Total deductions): 230,100 (Monthly), 2,761,200 (Annual)
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Thanks in advance
From India, Hyderabad
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Broadly, it is a correct structure. The employer has given 50% of the Basic, and probably the rest of the 50% will constitute other allowances.
As far as HRA is concerned, it varies from 25% to 45% of Basic Pay depending on the city where you are posted.
LTA is as per internal policy and IT Rules normally and seems in order.
PF is 12%, which is law-based and is also right.
All the best!
From India, Chennai
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321As far as HRA is concerned, it varies from 25% to 45% of Basic Pay depending on the city where you are posted.
LTA is as per internal policy and IT Rules normally and seems in order.
PF is 12%, which is law-based and is also right.
All the best!
From India, Chennai
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CTC Structure and Tax Implications
The calculation of the CTC structure is fine, and the HR has considered the wages definition as per the new wages code (which is yet to be implemented). However, in this structure, you may have to pay more income tax. In my opinion, it can be more tax-friendly by adding some reimbursement components (in place of "Special Allowances") like Mobile Reimbursement, Fuel Reimbursement, Book-Periodical Reimbursement, etc.
In the reimbursement process, you have to submit separate claims with bills, and you can get the amount as per the Reimbursement Policy.
HRA Considerations
The HRA can be given at different rates, but it is more important to show the HRA in a tax-friendly way. It is correctly shown here (being 40%, which is the maximum HRA exemption in the case of a non-metro city).
From India, Delhi
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The calculation of the CTC structure is fine, and the HR has considered the wages definition as per the new wages code (which is yet to be implemented). However, in this structure, you may have to pay more income tax. In my opinion, it can be more tax-friendly by adding some reimbursement components (in place of "Special Allowances") like Mobile Reimbursement, Fuel Reimbursement, Book-Periodical Reimbursement, etc.
In the reimbursement process, you have to submit separate claims with bills, and you can get the amount as per the Reimbursement Policy.
HRA Considerations
The HRA can be given at different rates, but it is more important to show the HRA in a tax-friendly way. It is correctly shown here (being 40%, which is the maximum HRA exemption in the case of a non-metro city).
From India, Delhi
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