Mahendra (Manager- Finance & Accounts) (51 Points)
19 July 2012Dear All,
i want to know is there any rule for Basic salary & other component. If i want only two head of my salary (Baisc & HRA) then what will be the effect ? Is it possible ?
sachin
(ARTICLES)
(434 Points)
Replied 19 July 2012
The main object of company is to give more be tax benefit to employee. So break up the salary in such a way that tax liability of the company as well as employee is reduced. There is no such rules.
Usually break up is done for tax management purpose.
For exmple - If u give 800 pm as basic salary. or if u give the same as transport allowance. then the same is exempt in case of employee.
There are many strategies for tax management.
sachin
(ARTICLES)
(434 Points)
Replied 19 July 2012
One rule is applicable that is Mininum wage Act. ( as applicable to the particular state)
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