The total cost to the company is the sum of all the benefits offered plus your salary. Below is an example of components of your CTC that is on your offer letter.
CTC |
|
Components |
Amount |
Basic Salary |
Rs. 3,00,000 |
Special Allowance |
Rs. 1,00,000 |
HRA |
Rs. 80,000 |
Medical Reimbursements |
Rs. 15,000 |
Medical Insurance for you and your family |
Rs. 5,000 |
PF (12% of basic) |
Rs. 36,000 |
Performance bonus |
Rs. 75,000 |
Total CTC |
Rs. 6,11,000 |
Whereas this is how your payslip will look for the CTC mentioned above.
Taxable Salary |
|
Components |
Amount |
Basic Salary |
Rs. 3,00,000 |
Special Allowance |
Rs. 1,00,000 |
HRA (less exemption on production of rent receipts) |
Rs. 50,000 |
Bonus received |
Rs. 70,000 |
Total Salary |
Rs. 5,20,000 |
Less: 12% PF |
Rs. 36,000 |
Less: Tax Payable* |
Rs. 12,875 |
Take Home Salary |
Rs. 4,71,125 |
Broadly your CTC will include these
1. Salary received each month
2. Retirement benefits such as PF and Gratuity
3. Non-monetary benefits such as an office cab service, medical insurance paid for by the company, or free meals at the office, a phone provided to you and bills reimbursed by your company.
Your take-home salary will include
1. Gross Salary received each month
2. Minus allowable exemptions such as HRA, LTA, conveyance allowance etc.
3. minus income taxes payable (calculated after considering Section 80 deductions)
*Tax Payable |
|
Total Salary |
Rs.5,20,000 |
Less: Deduction u/s Section 80C |
Rs.1,25,000 |
Taxable Salary |
Rs.3,95,000 |
Tax payable (includes cess; excludes interest payable) |
Rs.12,875 |