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CTC (God of Company)

CTC (Cost to Company) represents the total expenditure a company incurs on an employee annually, including salary, bonuses, and benefits, but does not directly reflect the employee's take-home pay. Key components of salary include basic salary, HRA, conveyance, medical allowance, special allowance, and deductions for provident fund, insurance, and gratuity. Employees should request a detailed breakdown of their salary structure to understand the implications for taxation and benefits.

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Geervaan Chaturved Esli Jayanand
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15 views12 pages

CTC (God of Company)

CTC (Cost to Company) represents the total expenditure a company incurs on an employee annually, including salary, bonuses, and benefits, but does not directly reflect the employee's take-home pay. Key components of salary include basic salary, HRA, conveyance, medical allowance, special allowance, and deductions for provident fund, insurance, and gratuity. Employees should request a detailed breakdown of their salary structure to understand the implications for taxation and benefits.

Uploaded by

Geervaan Chaturved Esli Jayanand
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

CTC (God of Company)

Diff b/w CTC & Salary

CTC is the money spent on employee by the company in a year.

Money is spent on bonus, perks, events, training, etc.

CTC is company number, not yours.


It’s not you directly get into salary slip, call offer letter.

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Imp. Notes:

Always ask the company for breakup of your basic salary, CTC etc...
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Some Important Terms

Basic Salary:

This is salary declared to the government for your role.

This is 100% taxable.


So higher this salary is, less ability to save tax.

HRA (House Rent Allowance):

It's 10% of your basic salary.

Note:

a) Metro city HRA is 50% of basic salary

b) Non-Metro city HRA is 40% of basic salary


How to claim it?

You have to give rent receipts which you got from owner.

Pls don’t use fake pancard etc...

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Conveyance & Medical Allowance


In India, it's ₹1,250/month

Special Allowance

It's used to lower the tax implication on their employees.

Eg. are school fee, dress allowance, etc.

Use of SA:
If you submit bills on end of year, you don’t need to pay tax on it.

Deductions:

These are the amounts which are automatically deducted in form of:

1. Provided Fund

2. Insurance & Gratuity


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i) Provided Fund

12% of your basic salary + 12% given by company combined is called PF allowance.

ii) Gratuity
It’s a Retentional Allowance.

We are eligible if we spend 5 years in company.

The company will assume that you will stay for 5 years & deduct small amount from your CTC every month.

If you leave the company 5 years before, then that is company saving.

iii) Insurance
Company gives many health insurance.

But it’s added to your CTC.

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iv) ESOPs (Employee Stock Option)

It’s the shares of company that you get an option to buy them.
For eg., if ESOP is 5.00 lakh, you will get it in part over 5 years 1L/year.

Cliff period: Min period that an employee has to work for the company before any of the option starts vesting.

Exercise period:

The period is around 3 months & we have the chance to buy the shares.

But we have to pay tax

to government (# New ESOPs is an income) according to gov.


Most of people exercise in liquidation state.

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