Is It Possible That My Net Take Home Is Lower Than My Basic Salary ?

Is it possible that my net take-home is lower than my basic salary? I have not taken any leaves, nor do I have any loan against my name. As far as I know, it is not possible, but my HR is challenging that it is possible.

Mahib_ul: Basic here means the basic component of your salary structure, right? If that is so, then no.

Yes, if a monthly salary is 25,000/- and you have joined in the middle of the month (even a day less than a month or worked days with acceptable leave, etc.), the net salary is certainly less than your basic. However, the situation could change if you have served for a whole month; the net salary will not be less than this, provided you have taken a loan, LOP, etc. Anyway, you have a great mind in HR, so be careful.

Deductions from salary cannot exceed 50% of the gross amount (or 75% if the deduction includes payments to an employee cooperative). If your basic salary is more than 50% of the gross salary and the deduction is at its maximum, your take-home pay can fall below the basic amount.

Are you a beginner or a senior? A wild guess, supposing you were absent for a long period, naturally, your earnings will be meager. At the same time, you will have other deductions such as official quarters or leased accommodation provided by the company, HR-related deductions, court attachments, other recoveries (all fixed amounts), if any, etc. These aggregated deductions may exceed your fixed basic salary, resulting in your net take-home pay being reduced.

Dear,

Can you provide me with your gross salary so that we can accurately calculate the possible deductions, such as IT deduction, PF/ESI/WC, or any other statutory deductions that may occur?

A rigid reduction of salary by $8500 cannot result in a decrease of take-home salary by $500, even considering the new PF rules. The impact of PF increase is limited to ₹1020 (or ₹1800 if you were earlier not covered by PF).

You do not need any law or rule in the act to say this is not possible. You got a salary slip, I hope. Check the comparison of components. What appears to have been done is to restructure the salary components to avoid PF. Then this is something for which the company can get into severe trouble.

Can you provide the details of the salary breakdown for comparison, i.e., the previous one and the current one, to the forum to give you an appropriate view.

Saswata da,

Rectify me if I am wrong... Net salary can be lower than take-home salary. I am saying this from my practical experience as a management professional, competent in laws, accounting, and financial audits.

For example, if someone has asked management to deduct more in the PF account contribution, then funds MAY BE transferred from basic into the PF account, thus making the net salary lower than the basic.

Again, suppose there is some item of salary for which management has done TAX DEDUCTION at the source, then the net salary may become lower than the gross.

Many loopholes are there. I think we should advise the guy to provide the details of the PAY SLIP so that we can give a concrete reply. Alternatively, we can advise the guy to meet a Chartered Accountant or Company Secretary in practice, provide him with details of his salary for a minimum of 1 year, and then request him to provide a certificate of his analysis. Thus, if there is any mistake, the CA/CS can detect and point it out, and the certificate must be ratified by the membership number of CA/CS with ICAI/ICSI and signature.

An experienced auditor knows what to write in such a certificate. I hope you understood.

And I am pretty sure HR can't challenge a qualified auditor without a valid reason(s). Thus, either explain the payslip to the employee or accept the ratified certificate of a qualified CA. A Gentleman's solution.

Thanks and Regards,

Sovik B