5.2 Monthly allowances are additional compensation paid to the employees, in addition to basic salary, to cover normal personal expenses. Monthly allowances usually include house rent allowance, utility allowance and conveyance allowance. Monthly allowances, in most cases, represent a break-up of gross pay for the purpose of taking advantage of relief under the relevant income tax laws.

For all details please visit: www.wrtbuzz.com

5.3 Some elements of monthly compensation may not result in any direct cash receipt for the employee. These may include rent-free accommodation, reimbursement of residence telephone and utility bills etc. Although if the accommodation is provided by the employer, it is adjusted against house rent entitlement but usually its monetized value is far more than house rent allowance. Market practices indicate that organizations, across the board, usually have provision for three types of monthly allowances which are:

For all details please visit: www.wrtbuzz.com

• House Rent Allowance @ 45% of basic salary
• Utility allowance upto @ 10% of basic salary
• Conveyance Allowance @ 10% of basic salary.