CAN SOMEONE SUGGEST ME HOW TOTAL SALARY CAN BE CATEGORIZED INTO DIFFERENT SEGMENTS SATISFYING INCOME TAX RULES. FOR EXAMPLE THERE IS TOTAL SALARY OF Rs 183333/- .
THIS TOTAL SALARY HAS TO HAVE SOMETHING LIKE Basic, HRA,CONVEYANCE, FBT .
CAN SOME ONE SUGGEST THE PERCENTAGES OF TOTAL SALARY THAT CAN BE DIVIDED INTO ABOVE SEGMENTS WHICH CAN BE ACCEPTED LEGALLY BY INCOME TAX.
Ram
| Originally posted by : Ram | ||
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CAN SOMEONE SUGGEST ME HOW TOTAL SALARY CAN BE CATEGORIZED INTO DIFFERENT SEGMENTS SATISFYING INCOME TAX RULES. FOR EXAMPLE THERE IS TOTAL SALARY OF Rs 183333/- . THIS TOTAL SALARY HAS TO HAVE SOMETHING LIKE Basic, HRA,CONVEYANCE, FBT . CAN SOME ONE SUGGEST THE PERCENTAGES OF TOTAL SALARY THAT CAN BE DIVIDED INTO ABOVE SEGMENTS WHICH CAN BE ACCEPTED LEGALLY BY INCOME TAX. Ram |
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50% to 60% of total salary can be considered as Basic (however the loss of PF contrinution by employers should be taken in to account)
30% to 40%of total salary can be taken as HRA
5% to 10% can be taken as transport allowance.
The total salary can be restructured from time to time to have maximum tax benefits.
You can set breakup to get max tax benefit:
like adjust HRA as per actual rent paid
Put edu alliowance, hostel allowance
medical allowance (15000 p.a tax free)
telephone allowance (actual reim and hence tax free)
Ram,
I think this will help you.
| Basic | 40% | 73333 | ||
| ER- PF | 9166 | 12.5% on Basic. | ||
| HRA | 50% | 36666 | ||
| Food Coupons | Maximum | 1300 | Exempted | considere 5 day week as Rs.50 per day is exempted |
| Transport Allowance | Standard | 800 | Exempted | |
| Medical Allowance | Standard | 1250 | Exempted | Exemped after actual submission of bill |
| Education Allowance | Standard | 200 | Exempted | Rs.100 per child and maximum up to 2 children |
| LTA | deduction | 5500 | Deduction | You can decide this figure as per company policy |
| Special all | 55117 | Difference amount after deducting above breakup | ||
| Total Salary | 183333 |
In addition to this you can add reimbursement extra to give more tax benefit.
PF 12.50% 9166 of basic you are really joking han…. PF contribution can never be more than Rs.780.00 but with employee permission we can deduct more than Rs.780.00 and its 12 % of basic.
What is so joking about it? PF is allowed at 12% of basic. Who told u Rs 780 is the ceiling limit? It is not
Yes Pankaj i completely agree with you. It is depend up on the company policy they maintain.
If you will have a survey some companies are paying at actual and some are maximum up to Rs.780.
As per PF Act every employee who is drawing salary (Bais+DA+Retaining Allow) Rs 6500 or less P.M is required to join the fund. (6500*12% = 780)
Employees drawing more than Rs 6500 P.M can also join the fund depending on company policies, most of the companies join based on Principle of Equity
can any one tell me is there any need to give expense slip of special allowance amount?
or it is given to us by the company only and it is tds exempted
CAclubindia
