Hi Cite HR Seniors, I recently joined a small company in Delhi with a staff of 30-32 people. I would like to understand the salary breakdown for an employee who earns a net salary of Rs. 18,000 in my company. How should we break down the salary, and if TDS (Tax Deducted at Source) is applicable, how much should be deducted for components such as HRA, conveyance, basic, etc.? It's important to note that we do not provide a medical allowance.
From India, Kumar
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Salary Breakdown Guidelines
The breakup can be done in the following manner:
- **Basic:** 50%-60% of the gross salary, but keep in mind that it should not be less than the minimum wages defined by the state government from time to time.
- **HRA:** 40%-50% of the basic salary.
- **Conveyance:** Not more than Rs. 800/-; anything above that amount is taxable.
- **Medical Allowance:** Not more than Rs. 1250/-; anything above that amount is taxable.
- **Telephone Allowance:** Not more than Rs. 1000/-; anything above that amount is taxable.
- The rest of the balance should be kept under special allowances or other allowances.
Hope this information helps you.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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256The breakup can be done in the following manner:
- **Basic:** 50%-60% of the gross salary, but keep in mind that it should not be less than the minimum wages defined by the state government from time to time.
- **HRA:** 40%-50% of the basic salary.
- **Conveyance:** Not more than Rs. 800/-; anything above that amount is taxable.
- **Medical Allowance:** Not more than Rs. 1250/-; anything above that amount is taxable.
- **Telephone Allowance:** Not more than Rs. 1000/-; anything above that amount is taxable.
- The rest of the balance should be kept under special allowances or other allowances.
Hope this information helps you.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Salary with TDS Calculation-Fin al Amended for net.xls