What is Management Allowance?

If you think that your entire salary is taxable, then that is not true. The overall package, which is termed as CTC, comprises many allowances. While calculating taxes, employees must know which allowance in the salary slip is actually taxable.

If you think that your entire salary is taxable, then that is not true. The overall package, which is termed as CTC, comprises many allowances. While calculating taxes, employees must know which allowance in the salary slip is actually taxable because there are certain other allowances which may be tax-free or fully or partially exempted in the hands of an employee.

Here are ten components which you generally see in your salary slip, but do not know the various tax implications occurring on the overall package. One should be aware of the exact taxable salary which he/she is drawing from one’s respective employer.

Your salary is divided into various components. Basic salary is one of the important components of a salary because various other components are dependent on it in terms of percentage or the other. It is a fixed component in your pay slip and forms the basic part of the salary. It forms a large portion of your total annual salary. HRA is mostly calculated as 40% /50% of the basic salary whereas PF is calculated at 12% of the basic salary.

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