Thursday, October 28, 2021

CTC calculator: the changes in the financial year 2020-2021

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The take home salary calculator assists in calculating the in hand amount of the employees. The CTC calculator makes it easy to determine various elements of the salary. It explains the break ups of the payroll components which has the potential to confuse the newly hired employees. Each organization has various elements that clubs the total salary of the employees. The online CTC calculator calculates the components of the salary such as take home salary, income tax, gratuity, PF contributions of both the employee and the employer, current tax savings and potential scope for tax savings. 


Updated calculator

The budget 2020-2021 has undergone various changes due to the uncertain scenario in the current world of work. The economic market has gone through a rough phase due to the uncertainty. Allowances such as conveyance allowance have been removed as an element from the calculation of the take home salary. The budget 2021 has engraved the standard deduction of 50,000. 

There are a few elements that needs to be considered to gain a better insight into the values which may not match every month:

  • Organizations tend to pay variables quarterly. The employees do not have the same take home amount at the end of each month. The changing variables change the take home amount of the employees.
  • CTC includes various variables, indicating the differing amount that is based on various factors. For instance, if the CTC amount is 10 lakh which includes the variable of 1 lakh. However the employee receives only half the amount in the financial year. In this case the employee needs to add the total amount clubbing the total amount received in the financial year for accurate calculation.  
  • The CTC calculations of PF and EPF amount is to be 12 percent of the basic pay. The gratuity amount is calculated to be 4.8 per cent of the total salary. If the payable amount differs from the stated percentage. It requires the employees to enter the accurate amount to determine the exact take home amount. 

The variable at times decreases the take home amount of the employees. But there are certain ways that can increase the take home salary. 


Ways to increase take home salary

  • There is a scheme to invest upto 1,50,000/ in ELSS,NSC,LIC and home loans.
  • Investment of 20,000/ in infrastructure bonds under income tax section 80 C,80 CCCand 80 CCD.
  • Investment of 20,000 under infrastructure bond of CCF under section 80 CCF, with a lock in period of 5 to 15 years. 
  • Saving amount in a bank where the tax exempt is is upto 10,000/.

The above mentioned ways are some of the best ways to decrease the income below the taxable amount slab set by the state and federal government. The brighter side of such investments is that it does not require the employees to pay emi of any installments in such investment. Instead, the employee just needs to leave the amount after investment for a couple of years. It provides the employees a better investment platform and even caters a profitable amount.

Also Read: 5 Noteworthy Advantages of Taking a Personal Loan from Fullerton India

The eligible amount varies depending on variables. It cannot be denied that the pandemic has created numerous changes in various sectors. The salary paid to the employees have been slashed, variables have changed. Such changes have perplexed the employees in determining the current cost to company amount. But the CTC calculators online have made it easier to gain a better understanding of the take home amount along with changing variables.

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