01 February 2016
You break up the salary for example into: Basic: Rs. 20,000; HRA (40% of basic): Rs. 8,000; Transport Allowance: Rs. 1,600; Medical expenses reimbursement on submission of bills: Rs. 1250; Children education allowance: 200 (for two children @ Rs. 100 each); Employer contribution towards PF: Rs. 2400; Out of the balance amount you may partly pay "other allowances / pay" (monthly) and partly reserve for annual benefits (such as LTA etc.).
Note: Basic salary is the deciding factor for computation of PF, leave enchashment, etc.
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