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After putting one's best foot forward throughout the year, an employee eagerly waits for the increment letter at the beginning of new financial year or after the end of salary cycle followed by its recruiter. However, confusion does arise when they compare their increment letter with new salary slip, especially when they come across a big gap between their actual CTC mentioned in the increment letter and the take hole salary mentioned in the salary slip. It is also important to remember that one should not let the immediate feeling of financial well-being get into their head. So, its very important for an employee to demystify one's salary slip after getting increment letter from the employer.

On how to demystify one's salary slip after receiving the increment letter from one's recruiter, Vinit Khandare, CEO and Founder at MyFundBazaar said, "The salary anatomy constitutes of the company name, employee details - income & reimbursements; basic salary, house rent allowance, conveyance allowance, travel/leave travel allowance, special allowances & deductions : professional tax, provident fund, income tax/tax deducted at source. An insight in one’s salary structure is beneficiary when one pays their income taxes or even to avail loans."

On variables one should compare while demystifying one's salary slip, Atul Pratap Singh, CEO & Co-Founder at Jobsgaar said, "The increment rush isn’t as uncommon as it sounds as much as a salary slip being taken for granted until a job switch or any banking purposes. While the CTC entails the entire amount covered to the employee, a salary slip varies from company to company. Keeping a check on the essentials - Name, Permanent Account Number (PAN), Employer’s Registered Name, Provident Fund Account Number, and Unique Account Number (UAN), the employee should consider keeping Basic Salary, DA, HRA, Conveyance/Travel/Leave Allowance, and other reimbursements under the scanner as well."

Atul Pratap Singh of jobsgaar went on to add that deductions like PF, ESI, PT, or TDS the employee should be aware of and understanding the overall salary structure is imperative to analyse one's income tax outgo.

On what instils further motivation for any employee is receiving their increment letter, Vinit Khandare of MyFundBazaar said, "From a financial standpoint, an employee should reassess their savings and expense budget & not let the immediate feeling of financial well-being get into their head. One needs to remember that money buys the freedom of choice in achieving one’s life goals and it is relevant only if it is nurtured well."

Highlighting upon the importance of reimbursement, variable and other deductions, Pankaj Mathpal, MD & CEO at Optima Money Mangers said, "Reimbursement part like conveyance, mobile bills, etc. of one's CTC allows an employee to enjoy income tax exemption and save money meant for income tax outgo. So, reimbursement part in one's CTC should be as high as it is allowed. On variable component, recruiters give an argument that it's nothing but a forced saving that helps an employee accumulate a handsome amount at the end of salary cycle. However, one gets this variable payment in next payment cycle when there is annual increment already added in one's CTC. So, this variable payment may enhance income tax slab of the employee in next payment cycle. Therefore, it is advisable for the employees to keep the variable component as less as possible."

Pankaj Mathpal of Optima Money Mangers went on to add that basic salary is also an important part of one's pay slip citing, "One's basic salary is directly linked with PF and Gratuity deduction, a mandatory investment meant for post-retirement life. Higher is the basic salary, higher will be the monthly PF and Gratuity deduction."

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