Requesting Clarification for the followings :
The Average Gross Salary of our workmen, totaling the components i.e. Basic/HRA/CON.ALL/MED/LTC/SPL.A. is Rs.48,000 (approx,). After the 10% increment for 2022-23 , the Gross Salary became Rs. 52800/-.But, the company wants to provide a special Salary of Rs. 2000/- once in five years which will not be added with the Gross Salary but it will be shown separately under a “different heading,”
As such, only the Gross Salary will be taken into consideration every year for salary revision purpose and not the special salary Rs.2000/ under a different heading, which will remain untouched ie, Rs.52800/ will be Rs. 58080 after 10% increment for 2023-2024 but Rs. 2000/- under different “heading” will remain same.
Kindly let us know whether there is any legal implication if we keep the special salary of Rs. 2000/ under “different heading” out of the Gross Salary to avoid yearly increment on special salary.
Further, kindly suggest a suitable name for the special salary as we would like to replace it with a suitable another heading.
Requesting our esteemed readers to educate us on the above.
From India, Bangalore
1The Average Gross Salary of our workmen, totaling the components i.e. Basic/HRA/CON.ALL/MED/LTC/SPL.A. is Rs.48,000 (approx,). After the 10% increment for 2022-23 , the Gross Salary became Rs. 52800/-.But, the company wants to provide a special Salary of Rs. 2000/- once in five years which will not be added with the Gross Salary but it will be shown separately under a “different heading,”
As such, only the Gross Salary will be taken into consideration every year for salary revision purpose and not the special salary Rs.2000/ under a different heading, which will remain untouched ie, Rs.52800/ will be Rs. 58080 after 10% increment for 2023-2024 but Rs. 2000/- under different “heading” will remain same.
Kindly let us know whether there is any legal implication if we keep the special salary of Rs. 2000/ under “different heading” out of the Gross Salary to avoid yearly increment on special salary.
Further, kindly suggest a suitable name for the special salary as we would like to replace it with a suitable another heading.
Requesting our esteemed readers to educate us on the above.
From India, Bangalore
One nomenclature widely used for such purpose in Government organisations/ PSUs is 'Personal Pay'. Normally Personal Pay is not counted for any purpose like DA, gratuity, bonus calculation etc unless it is specified to be included. The Personal Pay could be protected over any length of time or later merged in Basic Pay, as decided.
From India, Mumbai
From India, Mumbai
Personal Pay is normally a temporary arrangement when the revision takes place on percentage of gross pay and will be merged to the basic pay once the next slab increment in the time scales becomes effective. In the cited case, the amount of Rs 2000 accrues after a period of service, say five years. If so, why don't you call it as Loyalty Pay? It can be paid in lumpsum once in a year, that is Rs 24000 in one lot or monthly. It is always good if you pay it annually so that there will not be any confusion regarding its inclusion in gross pay which qualifies to increment. When it is paid every month along with the monthly salary, it can be disputed that it should be included in the salary for the purpose of increment. But if it is paid annually as loyalty allowance or loyalty pay as available only to those who have completed a certain years of service, the same can be excluded from the gross salary for all purposes.
From India, Kannur
From India, Kannur
Greetings,
I have similar situation, Company is paying for group insurance from their account for all employees.
For income tax benefit, company wants to show that amount in salary sheet in addition part (Total insurance amount divided by number of employees, to each employees- example total insurance amount is say 50,000, number of employees 10, so 5,000 to each employee) in the month of April only, but they want to show deduction of the same amount from salary for April itself.
Can any one please advise how it can be implemented?
As statutory deductions other than PF. ESI, PT, MLWF, advance etc... are not permitted. So under which head of deduction can be mentioned?
From India, Mumbai
I have similar situation, Company is paying for group insurance from their account for all employees.
For income tax benefit, company wants to show that amount in salary sheet in addition part (Total insurance amount divided by number of employees, to each employees- example total insurance amount is say 50,000, number of employees 10, so 5,000 to each employee) in the month of April only, but they want to show deduction of the same amount from salary for April itself.
Can any one please advise how it can be implemented?
As statutory deductions other than PF. ESI, PT, MLWF, advance etc... are not permitted. So under which head of deduction can be mentioned?
From India, Mumbai
It is surprising that the policy amount for the insurance taken by the company for the benefit of the employees is to be shown as recovery from the employee. Then how is it going to benefit the company by way of income tax? It will be a permissible deduction but when you recover it from the employees, how can it be claimed as the company expenditure?
From India, Kannur
From India, Kannur
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