Dear All,
My name is Dehulkumar Tillu, and I have been working in the pharmaceutical industry for the past 4.5 years. Every year, we have received increments at our company. However, this time, our HR department reduced our Basic Salary from 50% to 40%. Is this reduction valid? Can Basic Salary be decreased according to the rules?
We are not in favor of reducing our basic salary. Could you provide a clear example of the rules or any applicable laws/acts in this regard?
Thank you.
From India, Vadodara
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My name is Dehulkumar Tillu, and I have been working in the pharmaceutical industry for the past 4.5 years. Every year, we have received increments at our company. However, this time, our HR department reduced our Basic Salary from 50% to 40%. Is this reduction valid? Can Basic Salary be decreased according to the rules?
We are not in favor of reducing our basic salary. Could you provide a clear example of the rules or any applicable laws/acts in this regard?
Thank you.
From India, Vadodara
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Dear Dehulkumar ji, No employer can reduce basis salary and or gross salary. It is illegal.
From India, Mumbai
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2584From India, Mumbai
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Act only states that the Basic should not be less than the Minimum Wage and any statutory affecting Basic is forbidden. Kindly check with your HR the reason for reduction in Basic. As rightly mentioned by Mr. Keshav, it is unethical.
From India, Ahmadabad
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From India, Ahmadabad
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The basic should not be less than the minimum wage fixed by State/Central Authorities. There are instances where Dearness Allowance/Living Allowances are attached to Basic, and in such a case, reducing the basic is a loss for the employee. If the changed basic is above the minimum wage and total receipts are intact, then there is no damage. First, study the implications of the change. One should not disturb the pay package. They have to educate the employees. Sometimes it is to avoid payment of taxes to the Exchequer, such as income tax, professional tax, etc. I advise checking with HR.
From India, Nellore
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From India, Nellore
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Hi,
As per law, Basic should not be less than the Minimum Wages Act. If they reduce or increase it, there are no rules and regulations.
In my opinion, if they reduce your basic, then you will get a bit of relief from tax because the basic amount is fully taxable.
From India, Mumbai
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As per law, Basic should not be less than the Minimum Wages Act. If they reduce or increase it, there are no rules and regulations.
In my opinion, if they reduce your basic, then you will get a bit of relief from tax because the basic amount is fully taxable.
From India, Mumbai
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Dear Dehul Tillu,
I suggest you look at the increment hike rather than focusing on the basic hike. Basic salary is just one component of your entire salary structure. Ultimately, what matters is the total salary that goes into your pocket.
I also agree with Mr. Aditya's comments that reducing the basic salary will provide you with more benefits in terms of income tax.
Thank you.
From India, Ahmedabad
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I suggest you look at the increment hike rather than focusing on the basic hike. Basic salary is just one component of your entire salary structure. Ultimately, what matters is the total salary that goes into your pocket.
I also agree with Mr. Aditya's comments that reducing the basic salary will provide you with more benefits in terms of income tax.
Thank you.
From India, Ahmedabad
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Salary & Compensation Guidelines.zip