Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

grade pay in salary slip

Raj Thakkar (ARTICLE) (374 Points)

25 August 2018

In salary slip basic salary and grade pay is given separately, my question is whether For ITR-1 purpose this grade pay is require to include in the basic salary to arrive at the figure SALARY (EXCLUDING ALL THE ALLOWANCE, PERQUISITES & PROFIT IN LIEU OF SALARY) or not? please guide...

Reply
Follow
Share

8 Replies

Sanket (!..Live to Give..!) (16427 Points)
Replied 25 August 2018

No, you dont need to. the grade pay in salary slip is for informative purpose only. you need to show the due/actual received salary from your employer.

1 Like

Raj Thakkar (ARTICLE) (374 Points)
Replied 25 August 2018

Thank you sir for your reply, actually amount of that grade pay is taken in consideration for calculation of total amount of salary and so if I am not considering it in basic salary then it will automatically will be considered as allowance as we have to show it in ITR-1 so my question is whether grade pay is part of the basic salary or is it part of allowance? Please clarify and guide....

Sanket (!..Live to Give..!) (16427 Points)
Replied 25 August 2018

For Example.

The scale of an employee is Rs 5200-20200 & grade pay Rs 1800

Now coming to your question,
Basic pay = 5200-3%-20200
Grade pay =1800

It means your salary will be calculated as
(Basic + grade pay)+DA+HRA+MA (Misc. Allowance)

Presently, DA is around 110%, HRA may vary from 10% to 30% and MA can vary widely.
Here I'm assuming DA=110% HRA=20% MA=40%

Gross monthly salary
= (5200+1800)+(7000*1.10)+(7000*0.2)+(7000*0.4)
= 18900

Your net salary (that is your in hand salary) will be a little less due to PPF and other deductions. It is about 15-20% roughly. So net salary will be around Rs.16000 per month.

In this way grade pay is uesd. Hope you are clear.

1 Like

Raj Thakkar (ARTICLE) (374 Points)
Replied 25 August 2018

Thank you very much sir for your detailed answer

Sanket (!..Live to Give..!) (16427 Points)
Replied 25 August 2018

You are welcome..!

Raj Thakkar (ARTICLE) (374 Points)
Replied 25 August 2018

Thank you sir, Sir actual reason for asking this query is I was filing ITR-1 so I just want to know in bifurcation of salary whether the grade pay should be included in basic salary or in taxable allowances?