With the new wages code in India,
Atleast 50% of CTC should be basic pay. WTF rule is this. Now taking 40% of Basic as HRA and 12% as PF, thus (50+20+6+6) 82% of CTC is cash. What the hell will happen to our stocks?
Are we going to get screwed big time or is there any financial engineering possible?
#indiasalary #india #newwagescode #investments
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Its actually "min 50% of base salary should be basic pay".
A: Base salary which consists of basic pay, HRA and different allowances.
B: Stocks, signon, perf bonus, etc
C: Benefits
CTC = A + B + C
So, only the internal allocation of A will change.
Consequence:
Suppose, your base salary is 10L and 40% of it (4L) is basic pay. Then, you pay EPF and gratuity based on the basic pay.
Now, basic pay percentage is increased to min 50% of base salary. Your contribution to EPF and gratuity will increase (as it is based on basic pay). Thus, your effective monthly pay will decrease a bit (more of it will go to EPF and gratuity).
https://economictimes.indiatimes.com/news/economy/policy/new-wage-rule-may-raise-india-inc-costs-from-april/articleshow/79616790.cms