The employer gives you a bonus of Rs 50,000 for the financial year. To calculate the take-home salary, you must enter the Cost To Company (CTC) and the bonus, if any, as a fixed amount or a percentage of the CTC.įor example, your Cost To Company (CTC) is Rs 8 lakh. The state can charge the maximum amount of Rs 2,500 as a professional tax in a financial year. Professional Tax: Professional tax is the tax on employment levied by the state. The contribution made by the employee towards the EPF is available for a deduction under Section 80C of the Income Tax Act, 1961. It is a part of the gross salary and is fully taxable in the employee’s hands.Įmployee contribution to the provident fund: Both the employer and the employee contribute 12% of the employee’s basic salary each month to the EPF or employee provident fund. Special Allowance: The component in your salary structure called the special allowance is fully taxable in your salary.īonus: The employer may pay a performance incentive to the employee called the bonus. A salaried employee can claim the LTA exemption under Section 10(5) of the Income Tax Act. Employees must submit proof of travel to claim the allowance. Leave Travel Allowance (LTA): The employer gives an allowance to the employee for travel expenses called the leave travel allowance. However, HRA is fully taxable if you don’t live in rented accommodation. The house rent allowance or HRA is partially or fully exempt from taxes under Section 10(13A) of the Income Tax Act. House Rent Allowance (HRA): It is the component of the salary offered by the employer to the employees who reside in rented accommodation. The basic salary is a fixed component of the CTC (Cost To Company) package. The employer pays the employee for his skill, experience, and qualifications. The components of the salary structure are:īasic Salary: The employee’s basic income is around 40%-50% of the total salary. The employment contract specifies the wages, usually made each month. Such regular payment is termed as the salary.

The employer makes regular payments to the employee for the work done.

India post employee salary slip