Urgent Query : Compensation Structure in India - Limits

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2010 Hello,

I have an urgent query on how compensation packages are structured in India.

My US company is trying to offer me an Indian compensation package through their Indian partner for my move back to India later this year.

I realize that compensation packages in India are structured differently than ones in the US. In the US there is a Base Salary and the other company provided benefits (Medical/Dental/Social Security etc.) are seperate...there isnt a CTC concept.

In India I believe most companies have a CTC approach.

I would just like to understand what the upper limits are for the different allowances such as :

1. HRA
2. Fuel Allowance
3. Conveyance Allowance
4. Medical
5. Meal Vouchers etc.

Also can the Basic component be any % of the CTC or is there a lower and upper limit for that as well?

Thanks a lot!

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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08 August 2010 In India compensation structure maximum to be fixed by CTC base only.

Basic will be the some percentage on CTC fixed (it is employer policy)

HRA will be 40% or 50 % on the basic based on Non metro/metro

other allowances will be fixed based on the Income tax applicability and Grade of the employee in the organistion

Querist : Anonymous

Querist : Anonymous (Querist)

08 August 2010 Thanks Ramesh.

What do you mean by "Other allowances will be fixed based on the Income tax applicability"?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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10 August 2010 Allowances which is covered under section 10(14) of Income tax act
1.Children education allowance
2. Hostel expenses allowance
3. Uniform allowance
4. Transport allowance
and what ever allowance exemption decided based on expenses

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