To stop India’s top brains from leaving the country in search of better opportunities, the Narendra Modi Cabinet has approved hundreds of lavish scholarships.

Under the PM Research Fellowships (PMRF), 1,000 selected B.Tech students will get monthly scholarships of up to Rs. 80,000 for pursuing PhD at IITs and IISc.

Rs. 1,650cr has been allocated towards this scheme for seven years. Here’s more.

scholarships

All details of the scholarships under PMRF

Shortlisted students will be offered a monthly scholarship of Rs. 70,000 for the first two years, Rs. 75,000 for the third year and Rs. 80,000 for the fourth and fifth years.

Additionally, they will get Rs. 2L each as research grant, including travel expenses for presenting papers at international platforms.

They will also be exempted from Masters and can start PhD directly after B.Tech.

7,000 students to be covered in four years

One will have to get at a CGPA of least 8.0 and a striking research idea to be considered for the scheme.

Various fields like AI, robotics and nanotechnology will be covered.

In the first three years, 3,000 students will be chosen, 4,000 in the fourth year, and 4,000-5,000 anytime thereafter.

Currently, the maximum research scholarship is Rs. 28,000, HRD Minister Prakash Javadekar said.

PMRF will convert brain drain into brain gain: Javadekar

According to Javadekar, this will “address our national priorities on one hand and the shortage of quality faculty in premier educational institutions on the other.”

The government is planning to encourage research in other ways too, like upgrading facilities at IITs and IISc.

To ensure quality of faculty, it is mulling re-appointment of retired IIT and NIT professors for at least five years.

Salary Structure in India

What’s the ideal salary structure?

So what’s the best way to draft salary structures? To answer this, we’ve put together a table of the common components that make up a salary. We’ve also added recommended amounts to each component that should assist you in drafting an ideal salary structure.

Component	Recommendation
Basic	40-50% of CTC
DA	5% of CTC
HRA	50% of Basic + DA if metro and 40% if non-metro
Conveyance	Rs. 1,600 a month
Medical	Rs. 1250 a month
LTA	No real benchmark, can even be used as a plug, but if not can set as 10% of Basic
ESIC (Employer Contribution)	4.75% of Gross Salary
ESIC (Employee Contribution)	1.75% of Gross Salary
Special	Usually used as a balancing component
Provident Fund (Employer)*	12% of Basic + DA
Provident Fund (Employee)	12% of Basic + DA
Professional Tax	As per statewise slabs
Labour Welfare Fund	As per statewise slabs

*Note 1: The PF Employer Contribution also bears additional administrative charges
*Note 2: Feel free to use components like Child Hostel and Child Education; since they are small, we have ignored in our structure

For higher income employees:

• You can use Mobile, Driver Salary, Books and Periodicals and Car Maintenance
• You can set these amounts based on what you think the expenses of that employee would be, keeping in mind the exemption limits for Driver’s Salary and Car Maintenance.

Structuring Salaries is an inevitable task for every HR and Payroll professional. Despite the importance of the activity, professionals are often uninformed of the technical and best practices of a drafting a complete and efficient salary structure.

1) Basic Salary + Dearness allowance

The Basic component is the primary component and the core of the salary structure. It is usually the largest component of the CTC making up for 40-45% of the total CTC. The basic plays an important role in defining the salary as other components like Provident Fund, Gratuity and ESIC are dependent on it.

Dearness Allowance (DA) was introduced as part of the salary as a means to reduce the burden of inflation on salaried employees. This amount is usually set to about 5% of the total CTC and like the Basic component it also has an effect on PF, ESIC etc.

You should keep the following in mind while setting the amounts for Basic and DA:

If it’s too high, it will increase the tax liability of the employee since this component is fully taxable. It also affects the liability of the employer since higher contributions would be required for PF, ESIC etc.
If it’s too low, then you may not be able to meet the minimum wage norms set by the respective state government. Since minimum wages are updated regularly, you would run the risk of falling below the recommended wage limit.

2) House Rent Allowance (HRA)

The House Rent Allowance, as the name suggests is a component that employees can leverage if they are living in rented accommodations. The amount that you can claim as tax deduction under HRA cannot be more than 50% of your basic in a metro or 40% of your basic in a non-metro. Hence, depending on where your workplace is located, this salary component will usually be set at 40% or 50% of the basic salary.

When Should Employee declare the amount to get Tax benefit
At the beginning of new financial year along with your other tax saving plans (like LIC,PPF, Loan , etc), before 25th April’ 2018 employees need to declare their details with their employer for FY 2018-2019.
When should Employee submit actual proof to HR

Usually by the end of the financial year employees need to submit their tax saving documents with their concern HR. Resigned Employee : At the time of Exit employee should ensure to provide their actual tax saving proofs to concern HR before the FnF settlement gets finalised or else excess tax will be recovered from the settlement amount.

3) Leave travel allowance (LTA)

Leave travel allowance (LTA) remunerates employees for their travel within the country. This component is widely used by employers due to the tax benefits associated with it. An employee can claim tax benefits for the fare expenses paid for his/her family when they take a holiday. However, there are restrictions to what you can claim as tax benefits:

Only fare expenses are covered: Only the travel fare expenses can be claimed. Stay and food on your trip aren’t covered.
Travel must be within India: If you travel to a foreign country, the expenses aren’t tax deductible. Only travel within the country is covered.
What counts as family: Immediate family that are mainly dependant on the employee are covered under LTA.
When Should Employee declare the amount to get Tax benefit
At the beginning of new financial year along with your other tax saving plans (like LIC,PPF, Loan , etc), before 25th April’ 2018 employees need to declare their details under ‘Tax Declaration’ tab enter the Tax Saving Plans for FY 2018-2019.
When should Employee submit actual proof to HR

Usually by the end of the financial year employees need to submit their tax saving documents with their concern HR.Resigned Employee : At the time of Exit employee should ensure to provide their actual tax saving proofs to concern HR before the FnF settlement gets finalised or else excess tax will be recovered from the settlement amount.

4) Conveyance Allowance

Note: With the introduction of standard deduction, exemption on Conveyance allowance has been removed effective April 2018 onwards. Employees don’t need to collect or submit any Conveyance proof.

5) Medical Allowance

Note: With the introduction of standard deduction, exemption on Medical allowance has been removed effective April 2018 onwards. Employees don’t need to collect or submit any Medical proof.

6) Child Education Allowance

This component is paid out towards tuition fees of employees’ children and is tax deductible up to Rs. 100 every month for a maximum of two children. Hence, this amount is usually set to not more than Rs. 2,400 a year for an employee.

When Should Employee declare the amount to get Tax benefit
Provide the count of children to your concern HR, for availing tax benefit on Education Allowance.
When should Employee submit actual proof to HR
Usually by 15th January’ 2019 employees need to submit their tax saving documents with their concern HR.

Resigned Employee : At the time of Exit employee should ensure to provide their actual tax saving proofs to concern HR before the FnF settlement gets finalised or else excess tax will be recovered from the settlement amount.

7) Special Allowance

Special allowance is the balancing component of the salary structure. It is usually used by organisation as the leftover of the CTC when the rest of the components have been paid out. This component is fully taxable and is also taken into account for the calculation of Provident Fund.

Deductions:

Deductions are elements of the salary that are part of the CTC but are deducted from the in-hand salary that employees receive. Let’s take a deeper look at some of the most common salary deductions and what they mean.

1) Provident Fund

Provident Fund (PF) is calculated at 12% of Basic + DA + Special Allowance. The employer and the employee both make an equal contribution of 12% each. This is applicable to companies who have 20 or more employees on their payroll. If an employee’s Basic + DA + Special Allowance are less than Rs. 15,000 then it is mandatory for Provident Fund to be deducted. Other employees can opt out by filling form 11 or can choose to have PF deducted on the ceiling of Rs. 15,000 which would be Rs. 1,800 monthly.

2) Employees State Insurance Corporation (ESIC)

Deductions towards ESIC are mandatory for employees whose gross salary is not more than Rs. 21,000. It is only applicable in companies where there are 20 or more employees within the Rs.21,000 gross salary bracket. Employees have to make a contribution of 1.75% of the gross salary and employers have to make a contribution of 4.75% of the gross salary.

3) Professional Tax

Professional tax is the tax levied by Governments of certain states on salaried employees. The states where professional tax is applicable are Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, and Sikkim.

The amount of profession Tax that is deducted varies from state to state where they are applicable.

4) Labour Welfare Fund

Labour Welfare Fund, as the name suggests, is a contribution made by salaried employees for the benefit of the labour class. This contribution is applicable in the states of Karnataka, West Bengal, Maharashtra, Andhra Pradesh, Kerala, Goa, Delhi, Punjab, and Haryana & Madhya Pradesh.

The contribution amount varies from state to state and is relatively small. The employer and the employee both make contributions and the employer pays approximately twice the employee contribution. The payments are made semi-annually in the months of June and December.

Like Professional Tax, Labour Welfare Fund contributions also vary from state to state where they are applicable.

Component	Tax Deduction	Is PF Applicable?	Is ESIC Applicable	Part of Gratuity	Minimum Amount
Basic	Fully Taxable	Yes:	Yes	Yes	As per Minimum Wages
DA	Fully Taxable	Yes	Yes	Yes	As per Minimum Wages
Medical	Fully Taxable effective April 2018	No	Yes	No	None
Conveyance	Fully Taxable effective April 2018	No	Yes	No	None
HRA	Tax Exemption subject to the minimum of the following 3 conditions 1) Actual HRA 2) 50% of Basic + DA if Metro or 40% of Basic + DA if non metro 3) Total Rent – 10% of Basic	No	Yes	No	Varies Depending on the state
LTA	As per actuals of the fare expenses on leave travel	No	Yes	No	None
Children Education Allowance	Rs. 100 monthly for each child up to 2 children	No	Yes	No	None
Children Hostel Allowance	Rs. 300 monthly per child for up to 2 children	No	Yes	No	None
Mobile & Telephone Reimbursement	Actual expenses incurred on one mobile phone and one landline	No	No	No	None
Car Maintenance	Rs. 1800/- p.m. in case Cubic Capacity of engine is 1.6 litres or else Rs. 2400 p.m.	No	No	No	None
Driver Salary	Actuals of driver’s salary up to Rs. 900 monthly	No	No	No	None
Books & Periodicals	Actual expenses	No	No	No	None
Special	Fully Taxable	No	Yes	No	None

Deductions, when applied to the CTC give you the actual take-home salary that an employee gets.

vorugantyplacements

Monday, 7 May 2018

Govt offers tech scholarships of Rs. 80,000/month to fight brain-drain

Salary Structure in India