Salary ppt by Aviram Jena

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SALARY

Prepared byAviram Jena

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Contents

Net Salary

Dearness Allowance(DA)

Travelling Allowance(TA)

Provident Fund(PF)

Gratuity

House Rent Allowance(HRA)

Gross Salary

Insurance

Mediclaim

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Gross Salary

Gross Salary is the total salary received on MONTHLY BASIS

Gross salary = Salary before deductions

Key Definition

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Contents Gross Salary

Dearness Allowance(DA)

Travelling Allowance(TA)

House Rent Allowance(HRA)

Provident Fund(PF)

Gratuity

Insurance

Mediclaim

Net Salary

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Net Salary

Net Salary

Net Salary is gross salary less the deductions which are made on account of statutory compliances(like PF, Income Tax, Professional Tax) and other dues (Like Loans and Advances taken) which you owe to the Company and Legal dues if any. It is something you get in hand and commonly refer to as Take Home Pay.

Key Definition

Net Salary = Salary after deductions

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Let me explain with an example -

Let us say the employee earns the following per month:

• Basic Salary - INR 10000House Rent Allowance - INR 5000Convyeance Allowance - INR 1000Magazine Allowance - INR 500Education Allowance - INR 250

Then, GROSS SALARY - INR 16750

Deductions:

• Provident Fund - INR 1200Income Tax - INR 750Profession Tax - INR 130Loan Deduction - INR 750Total Deductions - INR 2830

Then, NETT SALARY - INR 13920

• His Leave Travel Allowance - INR 10000 per annumMedical Reimbursement - INR 10000 per annumPremium for mediclaim - INR 1500 per annumPF- Management Contrib.-INR 16332 per annum

Then, CTC (Cost to Co.) - INR 2,38,832 per annum.

CTC = Monthly Gross Salary X 12 + Annual benefits (INR 37832)

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Contents

Net Salary

Travelling Allowance(TA)

Provident Fund(PF)

Gratuity

House Rent Allowance(HRA)

Gross Salary

Dearness Allowance(DA)

Insurance

Mediclaim

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Dearness Allowance

Employees having fixed income suffer the

most due to rise in prices and to compensate

their loss, they are paid D.A. So D.A is nothing

but an addition salary and it is fully taxable.

Sometimes it is mentioned that :

1. D.A enters into pay for service benefits.

2. D.A enters into pay for retirement

benefits.

3. D.A is given under the terms of

employment.

4. Dearness pay.

Thus, it is treated as part of salary for certain

purposes such as provident fund, value of

rent free house, HRA, bonus, gratuity,

leave encashment

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Contents

Net Salary

Dearness Allowance(DA)

Provident Fund(PF)

Gratuity

House Rent Allowance(HRA)

Gross Salary

Travelling Allowance(TA)

Mediclaim

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Travelling Allowance

Any allowance granted to meet the cost of travel on tour or on transfer by the employer to his employee.

It is exempted upto actual expenditure incurred for the purpose of employment. Excess , if any, will be taxable.

Contents

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Net Salary

Dearness Allowance(DA)

Travelling Allowance(TA)

Provident Fund(PF)

Gratuity

Gross Salary

House Rent Allowance(HRA)

Mediclaim

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House Rent Allowance

Some times the employer does not provide rent free accommodation but instead makes a provision to pay some amount in cash, so that the employee may be compensated to some extent as far as rent is concerned. The amount of cash paid is known as house rent allowance.

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Contents

Net Salary

Dearness Allowance(DA)

Travelling Allowance(TA)

Gratuity

House Rent Allowance(HRA)

Gross Salary

Provident Fund(PF)

Mediclaim

Provident Fund

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To encourage savings for the social security of employees , the govt. has set up various kinds of provident fund. The employee contributes a fixed percentage of his salary towards these funds and in many cases employer also contributes. The whole contribution along with interest is credited to employee’s account. He will get payment out of this fund at the time of retirement and at some other important occasions. If the employee dies , his heirs will get the full payment.

Provident funds are of four types:1. Statutory provident fund2. Recognized provident fund3. Unrecognized provident fund4. Public provident fund

Contents

Net Salary

Dearness Allowance(DA)

Travelling Allowance(TA)

Provident Fund(PF)

House Rent Allowance(HRA)

Gross Salary

Gratuity

Mediclaim

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Gratuity

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Gratuity refers to a lump sum amount payment made by an employer to his employee at the time of leaving job in appreciation of his long and loyal services. Earlier it was a voluntary payment but now it has become a sort of compulsory payment for govt. employees, semi govt. employee and all other employees working in banks, colleges, factories etc.

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Contents Gross Salary

Net Salary

Dearness Allowance(DA)

Travelling Allowance(TA)

House Rent Allowance(HRA)

Provident Fund(PF)

Gratuity

Mediclaim

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MediClaim

Mediclaim Policy is an Insurance coverage wherein any of your Health related hospitalization bills can be claimed from the insurance company. There are two different ways to get your bills claimed either by cashless facility i.e your bills are directly paid to the hospital or you can pay your bills in the hospital and get an reimbursement after submission of the same to the insurance company.

Mediclaim policy helps employee for take the benefit of medical treatment. Employee’s come under it who pays amount to insurance company