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Section 1 Your payslip explained

Section I: Your payslip explained

The first step to understanding taxes should start with knowing what goes in to your payslip. Your monthly payslip will show you what’s been paid to you and what deductions have been made.

1. Basic Salary

This is a fixed component in your pay check and forms the basis of other portions of your salary and hence the name. It is usually a large portion of your total salary. HRA is also defined a percentage of this Basic Salary. Your PF is deducted at 12% of your Basic Salary.

2. House Rent Allowance

Salaried individuals who live in a rented house/apartment can claim House Rent Allowance or HRA to lower taxes. This can be partially or completely exempt from taxes. The allowance is for expenses related to rented accommodation.

If you receive HRA and dont live on rent your HRA shall be fully taxable.

3. Medical Reimbursement

If your company provides you with medical reimbursement of Rs.15,000 towards medical expenses, you must submit bills to your employer to claim this. These expenses could be incurred towards consultation with a doctor, medicines, medical tests etc.

Deductions can also be claimed against medical expenses of your dependents. Please check about this with your company.

Make sure to keep all the bills safely and submit them timely to your employer for reimbursement.

The Rs.15,000 you can claim is for each tax year that starts on April 1 and ends on March 31 next year

Section I: Your payslip explained



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