How you design a CTC decides how much tax your team pays on the same cost to you. Route pay into exempt allowances, reimbursements and retirement components and your employees keep more — at no extra cost to the company. Here's a ready template.
The same ₹15 lakh CTC can leave very different take-home depending on how it's split. Structuring pay into exempt and deductible components lowers the taxable salary — and it costs the employer nothing.
| Component | Why it helps |
|---|---|
| Basic salary (~40–50% of CTC) | Fully taxable — but it drives HRA, PF and gratuity, so keep it reasonable. |
| HRA (~50% of basic, metro) | Large exemption against rent — Section 10(13A). |
| Employer NPS — 80CCD(2) | Deductible up to 14% (or 10%) of salary — works in the new regime too. |
| LTA | Travel fare exempt, twice in a 4-year block — Section 10(5). |
| Meal / food card | ~₹50 per meal exempt (≈ ₹26,400/yr). |
| Fuel & driver / conveyance reimbursement | Exempt against actual bills. |
| Telephone / internet reimbursement | Exempt against bills. |
| Books, periodicals, uniform | Exempt against bills — Section 10(14). |
| Gratuity & PF | Build a tax-exempt retirement corpus. |
| Special allowance (balancing figure) | Fully taxable — keep it as small as the structure allows. |
Most allowances (HRA, LTA, reimbursements) don't help in the new regime — but the ₹75,000 standard deduction and employer NPS 80CCD(2) (up to 14%) still do. So for staff on the new regime, maximise the employer-NPS component — it's the single biggest lever left.
Employers, founders and HR designing pay packages — and employees negotiating an offer.
We build a compliant, tax-efficient salary structure and FBP for your team — and handle the payroll TDS.
💬 Set up my salary structure
EaseValue