What distinguishes a gross salary from a CTC?
The main difference between CTC and gross salary is , when employee provident fund and gratuity subtracted from CTC then it becomes equal to gross salary of an employee . CTC include many more benefits such as House Rent Allowance (HRA) , travel allowance , medical allowance , food allowance , incentives (bonuses) and many more varies from company to company. In above mentioned benefits employee gets tax benefits. If an employee submit the bills and documents of mentioned things in a company , before financial year begins then they will be able to save themselves from more tax burden. Basically Gross salary refers to the total amount paid to any employee before making any deduction from it including tax deduction.
Gross salary includes basic salary, house rent allowances, provident fund, special allowances such as travel, food and attire, Bonus, taxes. The basic salary is less when compared to CTC. In ideal case, the basic salary of any employee should be average of the gross salary, that is, it should never be very less nor closer to gross salary. It can be understood through an example, let us suppose that the gross salary of any employee is 1000 INR then in ideal case his basic salary should be 350-400.
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