It is a mandatory tax you need to pay to the state government. The employer’s contribution to EPF is a part of the CTC, and it does not appear on the salary slip. Your contribution is tax-deductible up to ₹1.5 lakhs under Section 80C of the Income Tax Act, 1961. Moreover, your employer matches your contribution and invests the same amount in your EPF account. You need to pay 12% of your basic salary as an EPF contribution. It is generally a mandatory savings scheme. The entire bonus amount is fully taxable. Bonusīonus is a component of the gross salary that the employers may pay as a performance encouragement.
The Special Allowance varies among companies as it depends on multiple factors. This is a fixed amount your employer may pay above your basic salary. You need to submit proof of travel to receive the tax benefit. Section 10(5) of the Income Tax Act, 1961 offers tax exemption on the LTA amount for up to two holidays in a four-calendar-year block. The allowance only covers railway ticket prices and airfares. Leave Travel Allowance (LTA)Įmployers pay this benefit for you and your family’s domestic travel expenses during a holiday. But, if you do not stay in a rented property, the entire component is taxable.ĬALCULATE HRA 3.
Section 10(13A) of the Income Tax Act, 1961 makes the HRA partially or fully tax exemptible. For the non-metro cities, the amount is 40% of your basic salary. The HRA amount equals 50% of the basic salary if you live in metro cities. House Rent Allowance (HRA)Ĭompanies pay the HRA to employees who stay in a rented property. It depends on factors like the industry, employee designation, and much more. There is no formula to calculate this amount. The basic salary is generally around 40% to 50% of your total salary. It is a part of the Cost to Company (CTC) that the employers pay to the employees for their services. Below is a list of the most common breakdown of the salary structure. The salary has many components that may vary among different employers. The amount they receive is usually mentioned in their contract as well as the pay slip. In every professional field, employees get paid at the end of the month by their employers.
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