Hi Friends,
After the budget of 2006, how can we divide salary components while considering both FBT liabilities on the employer and IT on the employee? Can anybody help me with the percentage of components to be divided from the gross salary: BP, DA, HRA, Conveyance, EA, TA, etc.?
Best Regards,
Ramesh Kannan G
From India, Coimbatore
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After the budget of 2006, how can we divide salary components while considering both FBT liabilities on the employer and IT on the employee? Can anybody help me with the percentage of components to be divided from the gross salary: BP, DA, HRA, Conveyance, EA, TA, etc.?
Best Regards,
Ramesh Kannan G
From India, Coimbatore
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Dear friend,
There is no significant impact from the viewpoint of the 2006 budget. Generally speaking, the compensation structure can be modeled as follows:
Assuming that the CTC = 1000, the following breakup may be considered:
- Basic can be between 33% to 40% of the CTC.
- Consequent effect on retirements.
- The rest can be part of a cafeteria/flexible benefit, where you may have the following components:
- HRA up to 100% of the basic salary.
- Medical Reimbursement @ Rs. 15,000/- p.a. - please note this will have FBT implications.
- LTA limited to 5-10% of CTC - you can avoid this as it has FBT implications.
- Variable should be within the CTC @ 11-15% of the annual cost.
Hope this is of some use.
Regards,
mxsingh
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There is no significant impact from the viewpoint of the 2006 budget. Generally speaking, the compensation structure can be modeled as follows:
Assuming that the CTC = 1000, the following breakup may be considered:
- Basic can be between 33% to 40% of the CTC.
- Consequent effect on retirements.
- The rest can be part of a cafeteria/flexible benefit, where you may have the following components:
- HRA up to 100% of the basic salary.
- Medical Reimbursement @ Rs. 15,000/- p.a. - please note this will have FBT implications.
- LTA limited to 5-10% of CTC - you can avoid this as it has FBT implications.
- Variable should be within the CTC @ 11-15% of the annual cost.
Hope this is of some use.
Regards,
mxsingh
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Please it will be helpful if you can give the full words for these acronyms:FBT, CTC, HRA, LTA, BP, DA, EA, TA...etc
From United Kingdom
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From United Kingdom
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Hello,
Here are some common acronyms related to compensation and benefits:
- CTC: Cost to Company
- FBT: Fringe Benefit Tax
- HRA: House Rent Allowance
- LTA: Leave Travel Allowance
- DA: Dearness Allowance
Additionally, Ramesh, you can include a Conveyance Allowance of 9600/- per annum, which is tax-exempt.
Regards,
Soumya Shankar
From India, Bangalore
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16Here are some common acronyms related to compensation and benefits:
- CTC: Cost to Company
- FBT: Fringe Benefit Tax
- HRA: House Rent Allowance
- LTA: Leave Travel Allowance
- DA: Dearness Allowance
Additionally, Ramesh, you can include a Conveyance Allowance of 9600/- per annum, which is tax-exempt.
Regards,
Soumya Shankar
From India, Bangalore
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