Hi All,
This is my first post in this forum. I\'m in requirement of some much needed help in understanding one of
the offers i have received. This offer looks pretty good & I\'m always wary of things that look too good :)
In the offer letter there is a component which says \"Other Allowance\" & apart from that there 5 separate allowances
as well.
I don\'t understand what this \"Other Allowance\" is & what is the break up?
My primary question is whether i will get the below mentioned \"Other Allowance\" in my
monthly salary or not? & what are somethings that are hidden that i should be careful about?
I don\'t know how to attach something here.
So let me just paste it.
Components Annual Monthly
Basic 300000 25000
Conveyance Allowance 9600 800
Dress Allowance 12000 1000
Educational Allowance 2400 200
Bonus/Ex Gratia 8400 700
Food Coupons 36000 3000
Gratuity 15000 1250
HRA 150000 12500
Variable 0 0
Leave Travel Allowance 37500 3125
Medical 15000 1250
Fuel & Maint Allwnce 39600 3300
Other Allowances 335140 27928.33
Employer Contribution to PF 9360 780
Telephone Allowance 30000 2500
1000000
*Annual Incentive 100000
CTC 1100000
*Please note Annual Incentive is separate & performance based.
Some points from the letter:
Allowances Optional
Please note that you have an option to choose between
(1) Food Allowance
(2) Medical Reimbursements
(3) Dress Reimbursements
(4) Leave Travel Assistance.
(5) Telephone Reimbursements
(6) Fuel and Maintenance Reimbursements
Subject to the detailed rules in relation to each of these allowances, you can avail of any or all of these
four tax-saving allowances. If you do not opt for any of these, the respective amounts will be taxable and
be paid as part of “Other Allowances”.
Food Allowance
Sodexho Coupons will be issued for Rs. 1,000/- or Rs.2500/- against Food Allowance for those who opt
for the same. This will attract 3% service charges. The amount deducted from your salary against food
allowance is entirely non-taxable.
Reimbursements
Medical, Dress, Fuel and Vehicle Maintenance reimbursement amounts will be non-taxable and will be
paid on a quarterly basis against the appropriate enclosures/bills produced with appropriate forms duly
filled. If bills are not produced during a quarter, this allowance gets carried forward to the next quarter.
During the financial year, you have two more chances (2nd & 3rd quarter) to submit appropriate bills for
reimbursement of the amount in a non-taxable manner. If bills of claim are not submitted until the last
quarter (4th quarter) of a financial year, then the unclaimed part of the reimbursements will become
taxable and will be paid after appropriate deduction of tax along with your salary for the month of March.
Please note that if you opt for these reimbursements, these respective amounts will be deducted from
your salary on a monthly basis and will be paid only on a quarterly basis against bills submitted. In the
absence of submission of bills during a quarter, the amount will be paid only in March. The above
reimbursements, except Medical and dress, would be made only after deducting 10% of the claim amount
towards personal uses and that only 90% of the claims would be reimbursable to you.
-----------------------------------------------------------------------------------------------------------------------------
As per my calculation (If I opt for only LTA & the rest in monthly) this will be my monthly
sal - 76228.33(Basic+Conveyance+Dress+EduAllowance+FoodC oupon+HRA+Fuel+OTHER ALLOWANCES+Telephone)
From India, Bangalore
1This is my first post in this forum. I\'m in requirement of some much needed help in understanding one of
the offers i have received. This offer looks pretty good & I\'m always wary of things that look too good :)
In the offer letter there is a component which says \"Other Allowance\" & apart from that there 5 separate allowances
as well.
I don\'t understand what this \"Other Allowance\" is & what is the break up?
My primary question is whether i will get the below mentioned \"Other Allowance\" in my
monthly salary or not? & what are somethings that are hidden that i should be careful about?
I don\'t know how to attach something here.
So let me just paste it.
Components Annual Monthly
Basic 300000 25000
Conveyance Allowance 9600 800
Dress Allowance 12000 1000
Educational Allowance 2400 200
Bonus/Ex Gratia 8400 700
Food Coupons 36000 3000
Gratuity 15000 1250
HRA 150000 12500
Variable 0 0
Leave Travel Allowance 37500 3125
Medical 15000 1250
Fuel & Maint Allwnce 39600 3300
Other Allowances 335140 27928.33
Employer Contribution to PF 9360 780
Telephone Allowance 30000 2500
1000000
*Annual Incentive 100000
CTC 1100000
*Please note Annual Incentive is separate & performance based.
Some points from the letter:
Allowances Optional
Please note that you have an option to choose between
(1) Food Allowance
(2) Medical Reimbursements
(3) Dress Reimbursements
(4) Leave Travel Assistance.
(5) Telephone Reimbursements
(6) Fuel and Maintenance Reimbursements
Subject to the detailed rules in relation to each of these allowances, you can avail of any or all of these
four tax-saving allowances. If you do not opt for any of these, the respective amounts will be taxable and
be paid as part of “Other Allowances”.
Food Allowance
Sodexho Coupons will be issued for Rs. 1,000/- or Rs.2500/- against Food Allowance for those who opt
for the same. This will attract 3% service charges. The amount deducted from your salary against food
allowance is entirely non-taxable.
Reimbursements
Medical, Dress, Fuel and Vehicle Maintenance reimbursement amounts will be non-taxable and will be
paid on a quarterly basis against the appropriate enclosures/bills produced with appropriate forms duly
filled. If bills are not produced during a quarter, this allowance gets carried forward to the next quarter.
During the financial year, you have two more chances (2nd & 3rd quarter) to submit appropriate bills for
reimbursement of the amount in a non-taxable manner. If bills of claim are not submitted until the last
quarter (4th quarter) of a financial year, then the unclaimed part of the reimbursements will become
taxable and will be paid after appropriate deduction of tax along with your salary for the month of March.
Please note that if you opt for these reimbursements, these respective amounts will be deducted from
your salary on a monthly basis and will be paid only on a quarterly basis against bills submitted. In the
absence of submission of bills during a quarter, the amount will be paid only in March. The above
reimbursements, except Medical and dress, would be made only after deducting 10% of the claim amount
towards personal uses and that only 90% of the claims would be reimbursable to you.
-----------------------------------------------------------------------------------------------------------------------------
As per my calculation (If I opt for only LTA & the rest in monthly) this will be my monthly
sal - 76228.33(Basic+Conveyance+Dress+EduAllowance+FoodC oupon+HRA+Fuel+OTHER ALLOWANCES+Telephone)
From India, Bangalore
Hello Gary
Today most of the companies offer excellent salary breakup, yours is one of them.
The above breakup is made to benefit you from Income Tax, some of the above perquisites are helpful for you to save tax. They have given you choice if you want to save tax choose above perquisites. or choose "other allowance"
Only thing is if you choose above perquisites you have to make proper documentation as per Act to avail tax benefit. Its up-to you now what you want to choose.
Only Annual incentives which is Starred is something which you should care about otherwise I feel above breakup is good one to choose.
Arun J
From India, Hyderabad
Today most of the companies offer excellent salary breakup, yours is one of them.
The above breakup is made to benefit you from Income Tax, some of the above perquisites are helpful for you to save tax. They have given you choice if you want to save tax choose above perquisites. or choose "other allowance"
Only thing is if you choose above perquisites you have to make proper documentation as per Act to avail tax benefit. Its up-to you now what you want to choose.
Only Annual incentives which is Starred is something which you should care about otherwise I feel above breakup is good one to choose.
Arun J
From India, Hyderabad
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