Should the salary breakup be changed after the discontinuation of Transport & Medical Allowance for FY 2018-19 Regards Subha S
From India, Pune
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From India, Pune
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Dear Subha,
You may change the structure of the salary components; however, while doing so, please ensure that basic wages are equal to minimum wages or more than that amount. Secondly, while framing a new structure, please do not reduce the basic salary.
Thanks,
Dinesh Divekar
From India, Bangalore
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8227You may change the structure of the salary components; however, while doing so, please ensure that basic wages are equal to minimum wages or more than that amount. Secondly, while framing a new structure, please do not reduce the basic salary.
Thanks,
Dinesh Divekar
From India, Bangalore
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Transport Allowance and Medical Allowance have been paid as fixed allowances apart from the Basic Salary all these years as they were non-taxable. However, they were part of Gross Salary and CTC.
Now that these two are taxable, one option is to continue paying the two allowances in the same manner as before, in which case the two will be added to taxable income; the other is to add the two allowances to the Basic, in which case they come under all other calculations which are based on Basic, e.g., HRA, PF, etc. Also, once you increase the Basic by adding these two allowances to the previous Basic, it will be difficult to reduce the Basic at a later stage if this amendment is reversed by some future government.
The best option is to continue paying the two allowances as they are and add them to taxable income.
From India, Kolkata
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Now that these two are taxable, one option is to continue paying the two allowances in the same manner as before, in which case the two will be added to taxable income; the other is to add the two allowances to the Basic, in which case they come under all other calculations which are based on Basic, e.g., HRA, PF, etc. Also, once you increase the Basic by adding these two allowances to the previous Basic, it will be difficult to reduce the Basic at a later stage if this amendment is reversed by some future government.
The best option is to continue paying the two allowances as they are and add them to taxable income.
From India, Kolkata
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