Hi All

I need your help. I'm in a HR Outsourcing BPO. I want to know something related to Salary Components. In Salary ,there are many components, like Basic salary, LTA , HRA , MEDICAL etc. So the Questions, which my subordinate asked to me why these components like LTA, Conveyance Allowances are added in Salary. Because LTA is a component paid to provide for any expenditure by an associates towards any travel in respect to him/herself and dependents thereof. and we are getting pick and drop facility also.So why this component is added in Salary?

Please help and reply as soon as possible

Hi Vijubob,

These components are added to salary for their tax breaks. LTA is tax-exempt for 2 years in every block of 4 years beginning from 1986-89, provided you follow the tax-exemption rules. So it is a good tax saving component.
Conveyance Allowance is exempt upto Rs. 800 pm. However, I am not sure whether you could avail of this exemption in a BPO company, because your company provides pick-n-drop facility.

Warm regards,
Patra