May 12, 2018 | Author: shreyachitnis5 | Category:Documents
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CTC refers to "COST TO COMPANY "

this includes : GROSS SALARY + incentives that are provided from the firm . Incentives includes many things like meal , medical facilities, phone facilities, house facilities , travel allowance etc. THE SUM OF ALL THE REWARDS AND BENEFITS PROVIDED TO AN EMPLOYEE FROM THE EMPLOYER + THE SALARY IS TERMED AS "COST TO COMPANY"

1.Base Salary – Taken into consideration while computing retiral benefits 2.House Rent Allowance 3.Leave Travel Allowance 4.Medical Allowance 5.Lunch Allowance 6. Other Allowance 7.Gratuity 8.Provident Fund 9.Conveyance 10.Personal Pay


Per Month

Per Annum

Base House Rental Allowance

4,791.66 8,333.33

57.500 1.00.000

Medical Conveyance Provident Fund Leave Travel Allowance

1,250 800 575 3,000

15.000 9.600 6,900 36,000




Provident Fund Tax will be deducted 2. Professional Tax will be deducted 3. Income Tax In the above case the take away for the employee would be after subtracting the following from the gross monthly figure of Rs 18,750 1) Professional Tax of Rs 60 2) Provident fund at 12% by the employee and an equal amount is paid by the organization – Rs 575 3) Income tax at 10% -Rs 127

ESIC •Employees’ State Insurance Scheme of India is an integrated social security scheme tailored to provide social protection to workers and their dependants, in the organized sector •It

includes contingencies, such as, sickness, maternity and death or disablement due to an employment injury or occupational hazard It applies to following categories of factories and establishments : * Non-seasonal factories using power and employing ten(10) or more persons * Non-seasonal and non power using factories and establishments employing twenty (20) or more persons. •Employees

covered under the scheme are entitled to medical facilities for self and dependants. •They

are also entitled to cash benefits in the event of specified contingencies resulting in loss of wages or earning capacity.

Pension •Is an arrangement to provide people with an income when they are no longer earning a regular income from employment •Pensions

should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum •The

common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms •A

recipient of a retirement pension is known as a pensioner or retiree

Gratuity • Is a part of salary that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company •Gratuity

is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job •An

employee may leave his job for various reasons, such as – retirement/superannuation, for a better job elsewhere, on being retrenched or by way of voluntary retirement

Provident Fund ?Provident Fund is the fund which is composed of the contributions made by the employee during the time he has worked along with an equal contribution by his employers. ?It

is calculated as a percentage of his salary, say, 12 % and is returned to him on his retirement. ?

The provident fund was originally set up in a bid to provide monetary security to employees when they retire.


are different types of Provident Funds. They are :•Statutory Provident Funds: – All industries and establishments that employ 20 or more people are bound to contribute towards these funds. These funds specifically cover those whose income is below a certain limit prescribed by the government •Voluntary Provident Funds: – The contributions to this fund are voluntary. This is applicable for all those whose salary is beyond the limit specified by the government •Recognized Provident Fund: – This is a fund wherein the contributions are recognized for income tax calculations •Unrecognized Provident Fund: – As the name suggests, contribution to these funds are not recognized by the Government •Public Provident Fund: – This kind of Provident fund is designed for self-employed people like doctors, lawyers, engineers, businessmen etc

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