Hello, I am in the process of designing the salary slip...please help.
What is the maximum limit for Basic Salary percentage in Gross salary? Can we opt for anything of our choice, or is there any defined percentage as per the law? Please specify the law regarding it. Thanks.
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From India, Delhi
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What is the maximum limit for Basic Salary percentage in Gross salary? Can we opt for anything of our choice, or is there any defined percentage as per the law? Please specify the law regarding it. Thanks.
What else can be added...
From India, Delhi
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Basic Salary
Generally, in many organizations, it is calculated as 50% of the gross wages. However, we must ensure that the basic salary shall not be less than the minimum wages as per the Minimum Wages Act. Many IT, ITES, and service industries will club both Basic and DA together. Every year, there is a revision in minimum wages, and it varies from industry to industry, location, and skill type.
HRA (House Rent Allowance)
As per the Income Tax Department, HRA exemption is 50% of the basic wages for metro cities and 40% for other locations. This exemption shall be considered only for employees who stay in rented premises.
Medical Allowance
According to the Income Tax Department, there is an option to have an exemption of Rs. 15,000 per annum (Rs. 1,250 per month) under Medical Allowance/Medical Reimbursement. Any amount declared above Rs. 15,000 per annum is taxable income.
Transport Allowance/Conveyance Allowance
As per the Income Tax Department, there is an option to have an exemption of Rs. 19,200 per annum (Rs. 1,600 per month) under Transport Allowance. This allowance covers travel expenses from home to office and back. If you claim any travel expenses incurred on an official trip, they are fully exempted from income tax. These allowances should be claimed separately by submitting the expense list or providing bills.
Children Education Allowance
Children's education allowance is exempted up to Rs. 100 per month for a maximum of two children.
Leave Travel Allowance
LTA exemption can be claimed when the employer provides LTA to the employee for leave to any place in India taken by the employee and their family. Such exemption is limited to the extent of actual travel costs incurred by the employee. Travel must be undertaken within India, as overseas destinations are not covered for exemption. LTA is calculated only on travel tickets, and food and accommodation are not considered for LTA exemption. LTA can be claimed twice in a block of four years. The current block is 2014-2017.
Other Allowance/Special Allowances
Many companies pay part of the amount as other allowances or special allowances, and these are fully taxable income only.
From India, Bangalore
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706Generally, in many organizations, it is calculated as 50% of the gross wages. However, we must ensure that the basic salary shall not be less than the minimum wages as per the Minimum Wages Act. Many IT, ITES, and service industries will club both Basic and DA together. Every year, there is a revision in minimum wages, and it varies from industry to industry, location, and skill type.
HRA (House Rent Allowance)
As per the Income Tax Department, HRA exemption is 50% of the basic wages for metro cities and 40% for other locations. This exemption shall be considered only for employees who stay in rented premises.
Medical Allowance
According to the Income Tax Department, there is an option to have an exemption of Rs. 15,000 per annum (Rs. 1,250 per month) under Medical Allowance/Medical Reimbursement. Any amount declared above Rs. 15,000 per annum is taxable income.
Transport Allowance/Conveyance Allowance
As per the Income Tax Department, there is an option to have an exemption of Rs. 19,200 per annum (Rs. 1,600 per month) under Transport Allowance. This allowance covers travel expenses from home to office and back. If you claim any travel expenses incurred on an official trip, they are fully exempted from income tax. These allowances should be claimed separately by submitting the expense list or providing bills.
Children Education Allowance
Children's education allowance is exempted up to Rs. 100 per month for a maximum of two children.
Leave Travel Allowance
LTA exemption can be claimed when the employer provides LTA to the employee for leave to any place in India taken by the employee and their family. Such exemption is limited to the extent of actual travel costs incurred by the employee. Travel must be undertaken within India, as overseas destinations are not covered for exemption. LTA is calculated only on travel tickets, and food and accommodation are not considered for LTA exemption. LTA can be claimed twice in a block of four years. The current block is 2014-2017.
Other Allowance/Special Allowances
Many companies pay part of the amount as other allowances or special allowances, and these are fully taxable income only.
From India, Bangalore
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