Finance
Decoding your salary slip: every line explained
Basic, HRA, LTA, PF, Professional Tax, TDS, gratuity — a complete walkthrough of every line on your payslip.
The structure of a typical Indian salary slip
Earnings: Basic, HRA, Special Allowance, LTA, Bonus, Reimbursements.
Deductions: Provident Fund (12% of Basic), Professional Tax (₹200/month in most states), Income Tax (TDS), Insurance Premium, Loan EMI.
Why Basic matters more than you think
Basic determines PF contribution, HRA exemption ceiling, and gratuity payable. A low Basic often masks a high CTC with poor in-hand.
HRA exemption (the simple formula)
Exempt portion is the minimum of:
- Actual HRA received
- 50% of Basic (metro) / 40% (non-metro)
- Rent paid minus 10% of Basic
What is Gross vs Net vs CTC
- CTC: Total cost to company (includes employer PF, gratuity, insurance).
- Gross: CTC minus employer contributions.
- Net (in-hand): Gross minus all deductions.
A CTC of ₹18L often becomes ₹11–12L in-hand after taxes.
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