Académique Documents
Professionnel Documents
Culture Documents
Amount
Basic Salary
480,000
Dearness Allowance
48,000
96,000
Conveyance Allowance
12,000
Entertainment Allowance
12,000
Overtime Allowance
12,000
Medical Reimbursements
15,000
Gross Salary
6,75,000
Benefits vary from company to company. Example of benefits for the above employee are:
Medical insurance
2000
Laptop
50,000
Total Benefits
109600
6,75,000 + 109600=7,84,600
Benefits would also vary from company to company. In some Laptop may not be provided. In some cost
of cubicle would be added. For example: If rent of office space is Rs 200 per sq ft and then a cubicle of 6
feet by 8 feet (i.e48 square feet) would cost Rs. 9,600 per month, or Rs. 1,15,200 per year. Which can be
added to your CTC. Please note CTC varies from company to company. One can read Cost To Company
or CTC salary: Understanding and Calculation for more details.
How tax affect the various components of salary
Component of
Salary(per annum or
Taxable
p.a)
Amount Tax
Amount
Basic Salary
480,000
480,000
Dearness Allowance
48,000
48,000
House Rent
Allowance
96,000
52,800
Conveyance
Allowance
12,000
2,400
Before FY
2015-16
Entertainment
Allowance
12,000
12,000
Overtime Allowance
12,000
Fully taxable
12,000
Medical
15,000
Reimbursements
Gross Salary
annually
6,75,00
0
6,07,200
HRA Calculation
As explained in HRA Exemption,Calculation,Tax and Income Tax Return , the minimum of the three
amounts will be exempt from tax:
a. Actual HRA allowance in the salary package, that is Rs 96,000
OR
b. HRA received less 10 per cent of salary and DA, that is 43,200 (96,000 10% of 528,000)
OR
c. If you live in metropolitan (Delhi, Chennai, Bombay and Calcutta), 50 per cent of salary and DA
However, if you live in any other city, it is 40 per cent of salary + DA. So, in this case it would be Rs
2,11,200 (40% of 528,000)
So HRA will be minimum of ( 96,000; 43,200; 2,11,200) which is 43,200 which will be exempted.
So the portion that will be taxed in this example is = 96,000 43,200 = 52,800
Tax
As Gross Taxable Salary 6,07,200 falls in the highest tax bracket. This tax amount includes education
cess too. Assumption: Employee does not make any tax saving investment. Tax based on Assement Year
2011-2012 : 57,103. For tax estimator Tax Calculator from AY 2010-11 is is very helpful.
Tax
57,103
Employee PF contribution(12% of Basic)
57,600
Professional Tax
2400
Total Deductions
1,17,103
=6,07,200- 1,17,103=4,90,097
=490097/12=40,841.41
5,07,200
Tax
33,413
57,600
Professional Tax
2400
Total Deductions
93,413
=6,07,200- 93,413=5,13,787
=513787/12=42,815.58
Tax saving instruments under section 80C, 80G, House loan etc are beautifully depicted in
thisinfographic. Optimum Salary Structure Maximum In Hand Salary Or Minimum Tax Liability explains
how restructuring the salary would increase the take home
Form 16
If you are salaried employee in an organization, then you get the salary after deducting tax by the
employer. This process is called as Tax Deduction at Source (TDS). Company must issue a Form 16
which contains the details about the salary earned by that employee and how much tax deducted. The
Tax deducted is paid to government by the company. Form 16 is the proof of employees income and
tax paid to the govt. It is issued under section 203 of Income Tax Act for Tax. Tax payer has to use the
Form 16 to file the Income Tax return every financial year. One can read Understand Your Form 16
Disclaimer: While efforts have been made to ensure the accuracy of the information provided in the
content, the web site or the author shall not be held responsible for any loss caused to any person
whatsoever who accesses or uses or is supplied with the content (consisting of articles and
information).Do you know the biggest employers in the world. Wal-Mart , a chain of department stores
across the globe, employs 2.1 million employees worldwide. The Indian State Railways which has 1.42
million employees, is largest employer in India.Ref: Salary Income Tax Heads of Income:
Salary Understanding CTC and Your Salary Breakup, Tax implications of salary components, All you
wanted to know about CTC
Earning section of our website bemoneyaware.com covers: basics of earning such as How people earn
money by working for someone else , How people earn money by starting their own business, Factors on
which persons income depends , Story on when we value money,Profit and Loss, Salaries of some
famous Indian personalities, Salaries of some famous International personalities, Best jobs in the
world, Worst jobs in the world