Salary Related - Medical Allowance

Dear Balaji,

I request you to pleas revisit my views where I said "In my views, UNTIL the HRA and Medical Allowance are calculated and expressed specifically in terms of certain fixed percentage of the basic salary, the management would not enjoy the right to deny these facilities to the employee, more particularly for his medical treatment."
We should not go by mere presumptions. We need to look the situation due taking care of real position as on record in any organization. No common system is adopted by all organization. Salary structure differ from organization to organization.

You must have noticed, Anuja has not come up with the types of components of the salary allowed, whether medical & HRA are granted as a fixed percentage to the basic pay, or the fixed lump sum, whether paid every month or in the shape of reimbursement of the claims preferred by the employee, etc.

If these allowances are of the nature of certain specific percentages to the basic pay, only then these allowances can be affected, as in that case only these have direct relation with the basic pay. But, if these allowances are of fixed lump sum nature, irrespective whether paid monthly or reimbursed on preferring claim by the employee, the said allowances won't have any direct relation with the basic pay, more specifically the medical charges and cannot get affected by the reduction of basic salary.

Dear All,
Thanks all for the reply ..Mr.Dhingra and Mr.Balagi have already put in their valuable views on the same and i am really thankful to them ...I am new to HR and so may be i framed my question wrongly .... but definately i have got answers for my question .
In our organisation salary structure was prepared long back when i was not a part of organisation .
HRA and Medical allowance are granted as fixed percentage to Basic pay and are not given as fixed lumpsum or reimbursed .
So what i feel from the answers which i have received that HRA and Medical are bound to be reduced from salary in case of without pay holiday .
I hope that whatever i have written is right now .
With Best Regards,
Anuja Puranik

In this discussion, I am with Mr. Balaji's opinion.
Irrespective of whether HRA and any other Allowance, (which is a part of Monthly Salary of the employee) is a percentage of a basic salary or a fixed allowance, it is directly linked to 'salary days payable'. Hence in case of Absence or Leave Without Pay, not only basic salary but all the monthly allowances will be deducted proportionately.
This is very commonly followed practice across all industries, across India and I have not come across any organization making exception to above practice. As stated by Mr. Balaji, this practice is perfectly legal and ethical.

Hello HR,
I could not submit the investment proof on the date as decided by my company becasue I was absent in those days. Eventhought I have made the invemstment during the year. Now company is deducting the big amount of tax from my salary everymonth. Can I stop the company from deducting TDS by the help of any external authority like IT department?
Please advise.
Thanks & Kind Regards

The DDO of any company has to plan TDS right from the beginning of the year. So, that tentative amount of tax may be deducted in equated installments from the salary of the employee every month. But, any investment made during the previous year (i.e., current financial year of the salary) must have to be accounted for by the DDO, if the employee provides details even before the last month's salary of the financial year if yet to be drawn by the company. Whatever deduction is possible, should have to be allowed to the employee by modifying the remaining part of the estimated amount of TDS to be recovered. However, if any shortage still persists in allowable rebate on account of investment the same can be claimed direct from the Income Tax Department by the employee giving complete details of investments in the IT Return to be submitted before due date after the close of the financial year.

So, you can still submit proof of the investment made by you to the company, as salary for the month of February would still be due to be drawn by the DDO of the company. But, once the tax is deducted through salary bill, company cannot make refund of the excess amount recovered, as tax. In that case you will have to claim refund from the concerned Income Tax Officer.

PS Dhingra
CEO
Dhingra Group of Management & Vigilance Consultants
New Delhi
[dcgroup1962@gmail.com]