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GeekInterview.com > Interview Questions > Accounting > General Ledger
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Question: Salary Computation
Answer: Explain Salary Computation. How to file the salary returns? |
| July 07, 2009 11:49:14 |
#1 |
| malini.007 |
Member Since: July 2009 Total Comments: 3 |
RE: Salary Computation
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Generally, the salary is computed as
Basic : 30 - 35% of CTC
HRA : 50% of Basic
DA : Regulated by Govt. notifications (nominal amounts)
CCA : Is normally a filler on negotiated salary (put the balance amount in
this). Otherwise, 30% of CTC
Gratuity : Is statutory (consider 4.81%)
Superannuation : 15% - 27% of basic (27% if there is no PF)
Leave Encashment : Taxable under provision of IT Act.
Tax deduction is based on various things like HRA claim (least of the 3 conditions under the IT Act - could also be non-taxable if claimed properly), investments done by employee, attraction of 80C/cca, (basic, cca fully taxed based on IT slabs), etc. Please refer to the IT Act (direct taxes) or your Finance deptt for more details..)
The above comp. structure can be tweaked or more components added based on the Co's requirements. That needs a discussion.....It may vary co. to co. or industry to industry |
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