Hi, Can anyone please explain that why salary split-up is done Eg: Basic House Rent Allowances Medical Allowances DA What is the benefit of having salary structure. Thanks & Regards cgnanij
From India, Madras
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9From India, Madras
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Hi Cgnanij,
The salary components are split for the following reasons:
PF -12 % is levied on the Basic salary which is a statutory requirement and also provides the employee tax benefit understand section 81 D while computing his taxable income.
HRA – here again one gets the tax benefit by providing the actual rent receipts as per the IT tax act.
The essence of the salary structure is to provide the balance in tax benefits to employees viz higher take home salary as per the IT Act and also meet the statutory requirements.
Regards,
Rajat
From India, Pune
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The salary components are split for the following reasons:
- Tax benefits
- Ease of administration of C&B.
- Standardization of the components
- Statutory requirements
PF -12 % is levied on the Basic salary which is a statutory requirement and also provides the employee tax benefit understand section 81 D while computing his taxable income.
HRA – here again one gets the tax benefit by providing the actual rent receipts as per the IT tax act.
The essence of the salary structure is to provide the balance in tax benefits to employees viz higher take home salary as per the IT Act and also meet the statutory requirements.
Regards,
Rajat
From India, Pune
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Salary split up is done in the following way:
- Basic: 40%
- HRA: 20%
- Medical Allowance: 10%
- Miscellaneous: 1%
- Conveyance: 6%
- Education: 13%
In addition to that, we have PF which is explained nicely above. If you want to know more about PF and ESI, you can email me at
.
From India, Calcutta
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- Basic: 40%
- HRA: 20%
- Medical Allowance: 10%
- Miscellaneous: 1%
- Conveyance: 6%
- Education: 13%
In addition to that, we have PF which is explained nicely above. If you want to know more about PF and ESI, you can email me at
From India, Calcutta
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Creating a Competitive Salary Structure.doc
Salary Structure.zip