1. Brief Introduction on Salary Components and their Income Tax Applicability

2. Financial Components at HCL
Salary Components
Flexi Basket
HCL Pay Slip content
Financial Components at HCL
PAN
Declaration
Vehicle Declaration and Perk
Tax Exemptions
Income Tax Slabs
Statutory Deductions (PF)
Previous income Declaration

3. Salary Components Salary Components Taxable *Remarks
Fixed Salary Components
Yes
Fixed components are taxable as per income tax rules and guidelines in this regard. These are Basic, HRA, Lifestyle All, Holiday All, Management All, Conveyance All, Medical All etc.
Flexi Salary Components
Partially Taxable
Flexi salary components are available to employees above E1 band and can be claimed as reimbursement. You got an option to choose whether you want to receive it with monthly salary or as reimbursement by submitting actual expense bills for which you need to make Flexi Declaration. These are Car All, Fuel and Vehicle Maintenance All and Leave Travel All. These components are partially tax free when taken as reimbursement but fully taxable if paid with salary.

4. Salary Components Salary Components Taxable *Remarks Basic Salary Yes
 Fully taxable
HRA (Houser Rent Allowance)
Yes*
Exemption will be least of 3 below as per IT rules 1. Actual HRA received by the employee (or) 2. Excess of Rent paid over 10% of Basic Salary (or)
3. 50% of the Basic Salary where the residential house is situated in Metropolitan i.e. Mumbai, Calcutta, Delhi & Chennai and 40% for Non-Metro cities
*Rent paid above Rs. 1 Lakh p.a requires Landlord’s PAN while submitting rent receipts at the time of actual proof submission drive in December every year.
Conveyance Allowance
Exempt upto 800 pm - maximum /per annum only upto E1 band. Not applicable for band >E1.
LTA (Leave Travel Allowance)
Exempt subject to income tax rules if opted to be paid as reimbursement, if opted to get paid in salary (Holiday Allowance) then fully taxable.
Medical Allowance
Exempted up to Rs per annum subject to medicals bills submitted at the time of actual proof submission.
Other components (Management / Lifestyle / Vehicle maintenance / Fuel / Car Allowance etc)

5. Flexi Components in salary (Band E2 and above)
Flexi basket consists of Car Lease, Fuel & Maintenance and LTA. Entitlement as per offer letter updated as annual component (reimbursable) by default. If you want to take it as part of monthly salary, you have to do a flexi declaration, ie setting aside a portion as reimbursement and taking the rest as taxable allowances. Option of CAR LEASE and Fuel Maintenance is not available for INFRA employees who are availing FREE CAB FACILITY.
Where to Declare: Myhcl  My Transactions  Common  My Flexi Declaration
Flexi claim Cycle:
Band E2 & E3 : July to June Cycle
Band E4 and above : October to September Cycle
How to claim Fuel and maintenance Reimbursement
Myhcl  My Transactions  Common  Cash Claim  New Claim  Flexi Claim
Scan and Upload actual expenses bills. Take care to select the bill month correctly to avail the full available exemption.
Reimbursements credited thrice in a month on 6th / 15th / 25th
Unclaimed flexi balance will be paid in the month following the end of cycle as fully taxable.

6. Business Rules on Perquisite Calculation for Vehicle Maintenance
Category of
the Vehicle
Tax Exemption on flexi claims (Y/N)
Tax Exemption
Engine Upto 1600 cc
Beyond 1600 cc
Car taken under HCL car policy Y
Rs p.m taxable and rest claimed as reimb. will be tax free
Rs p.m. taxable and rest claimed as reimb. will be tax free
Car registered in name of employee
Rs.1800 p.m exempt and rest claimed as reimb. will be taxable
Rs p.m. exempt and rest claimed as reimb. will be taxable
Car not registered in employee’s name N
Reimb. claims fully taxable
2 Wheeler
Rs. 900 per month can be taken tax free and rest entire claim will be taxable.

7. Vehicle Declaration
Declare your Vehicle (either 2 or 4 wheeler, you can not declare more than one).
Myhcl.com  My Transactions  HR  Vehicle Declaration
Upload scan copy of Vehicle RC registered in your name.
If vehicle is not registered in your name, your declaration will be rejected.
If Declaration not given, it will be treated as vehicle not owned by employee and your entire flexi claim(reimbursement) will be taxable.
Please note that Flexi and Vehicle Declarations are separate applications and both have to be declared accordingly to avail tax benefits.

8. Tax Slabs –Financial Year 2016-17)
Income Tax Slabs for Individuals
Taxable Income (Rs.)
From – To
Rate (Percentage %)
0 – 2.5 Lacs
Nil
2.5 Lacs – 5 Lacs
10%
5 Lacs – 10 Lacs
20%
10 Lacs and above
30%
Add : Education Cess
3% on Income tax and surcharge (surcharge of 10% applicable if taxable income exceeds Rs.1crore)

9. Provisional Tax Declaration and monthly tax deduction
Make provisional investment declarations (estimated savings for the year) in myhcl.com before 20th of the month. Myhcl.comMyTransactions  HR  IT Declaration
Declaration submitted by 20th gets considered in same month’s payroll. Provisional declaration is valid till December of the year.
Considering your income due till March and provisional investment declarations, tax liability is calculated & deducted every month & remitted to Government immediately. Once tax is deducted it can not be refunded to the employee. However, it can be adjusted against remaining tax liability for the year, if any.
Professional Tax – deduction is based on income slab and remitted to the Municipal Corporation. Deduction varies from place to place either monthly or twice in a year.
Provident fund - 12% of basic salary (for regular employees) will be deducted every month and remitted to your PF account. This is auto considered as investment u/s 80C.
Voluntary Provident Fund (VPF) Contribution – Maximum 8% of basic salary can be contributed by an employee. Employer does not contribute to VPF. This is auto considered as investment u/s 80C.

10. CTC & Gross Salary in Pay slip
Gross Salary in your pay slip reflects your earnings for the Financial Year from April to March for components getting paid monthly through Payroll.
If DOJ falls after April of the Financial Year then the pay slip will show prorated salary. Consider monthly gross salary as Rs.10,000:
If DOJ is April 01st then Rs.10,000 * 12 months (Apr – Mar) = Rs.1,20,000/- will reflect as Gross Salary in payslip.
If DOJ is May 01st then Rs.10,000 * 11 months (May – Mar) =Rs.1,10,000/- will appear as Gross Salary in payslip.
Your CTC in appointment letter & gross salary in Income tax computation sheet of your pay slip will not match because Gratuity, Medical Insurance, PF contribution by HCL are not included in your Gross Salary of pay slip as they are retiral benefits and are not payable along with salary.

11. Previous Employment’s income declaration
New joinee (regular employees) should submit following documents for updating previous employment income and taxation details in HCL :
Form 16 if issued by previous employer, or
provisional tax statement (not pay slip)/salary certificate, or
Full and final statement along with
Signed Form 12B.
Please mention your Emp code on above documents and drop them in ES drop box of your facility to be checked and udpated by ES.
These documents are required to evaluate your correct tax liability for the entire financial year failing to do which may result in short/excess tax liability at the time of filing of individual Income Tax Return at the end of the year.
If you were employed in HCL and re-joining in same financial year and your previous Emp code is updated in joining portal, then payroll system automatically calculates total income merging income for both Emp codes.

12. Exemption Explanation
The following are the Investments eligible for getting exemption in U/s 80C , maximum eligibility is Rs.1 Lac (including your salary Provident Fund)
Investment category
Invested on
Life Insurance Premium,
 Employee or minor child or spouse
National Savings Certificate (NSC) from post Office,
Employee or minor child or spouse.
Children School Fees (max 2 Nos.) only tuition fees is exempt,
 NA
Fixed Deposits with banks specifically covered u/s 80c
 Employee name
Equity Linked Savings Scheme (ELSS) of mutual funds,
United Linked Insurance Policy (ULIP),
Public Provident Fund (PPF),
Housing Loan Principal (for New House Stamp Duty & Registration Charges can be claimed )
Notified Pension Fund (u/s 80CCC)
Employee name

13. Exemptions contd..
87A
Employees whose total income (gross total income minus deductions u/s 80c to 80 u) does not exceed 5 lacs a rebate of 100% of tax payable on total income or 2000/- whichever is less is given from income tax. It means if the total income is up to 220,000/- tax is not payable.
80E
Education Loan Interest (Entire interest paid during the financial year is exempt, no maximum limit). Principal paid is not eligible. (it can be claimed from the start of Repayment of loan up to 8 years) It can be claimed in respect of loan taken for self or dependent children or spouse.
80D
Medical Health Insurance Premium – Rs.15,000/- for self , spouse, child. It will go up by 5000/ in case any one aged more than 60 years.
Additional exemption of Rs in respect of insurance taken for parents .If any of their age exceeds 60 then additional deduction of 5000 is available.
The above exemption is applicable if policy taken on your own from outside agencies.
No benefit in respect of medical insurance on your family taken by HCL since it is a group insurance policy taken by HCL for its employees. However if you pay top up premium you can claim the same under 80 D
80 U
Provide certificate from notified Medical Authority for self Disability (80 U) to avail tax benefit.

14. Interest on house property – U/S 24
Exemption contd.
Interest on house property – U/S 24
Any interest paid on loan taken for the acquisition/construction of house property subject to the following conditions:
Maximum exemption under this section is Rs. 1.5 Lacs
Exemption allowed if House Property is owned by the employee else not allowed
Property under construction will not get the exemption. Any interest paid during the construction period will be considered only after property completion, but will be allowed in 5 Installments starting from year of completion.
No deduction is available for loan taken for purchase of plot.

15. Submission of PAN details
If an employee does not submit the PAN or submits incorrect PAN details the organization has to deduct TDS at flat rate of 20% without giving the basic exemption limit of Rs.2 Lacs , till the income of Rs.10 Lacs.
Eg: A person with Rs.200,001 salary will get taxed at 20% on entire Rs without considering the fact that income upto Rs. 2Lac is not taxable.
Update your PAN details before 20th of the month at Myhcl.com  My Career  My profile(ESS)  my information( Account)  PAN
Incorrect updation of PAN leads to problems in your tax assessment. HCL will not be able to support you later on, the consequences of incorrect PAN be borne by employee only.
Correct PAN details helps you to get tax refund from IT Department upon filing of IT returns at the end of the financial year and complete your assessment.
Note : Individual PAN will have “P” as the 4th character. First 5 characters are alphabets, next 4 characters are numbers and last character should be alphabet again. If your PAN does not have this structure please check with your consultant/income tax department immediately. .

16. Earnings and Deduction of that month’s salary
Sample Pay slip:
Personal Details: Name, Designation, Work Location
Ecode, DOJ, PF#, PAN, Bank a/c details, Days worked, LWP etc.,
Earnings and Deduction of that month’s salary
Salary components
Basic, HRA, Allowances etc.,

17. Sample Pay slip: (Income Tax Computation)
Contributions under 80C and Monthly Tax deductions
HRA Exemption
>Tax on Income
>Tax Deducted
> Balance Tax

18. Points to Remember
Check Salary Bank account details in My profile page and in your Pay Slip.
One time payment like (New Born Gift, Marriage Gifts, Deputation Allowance, Ex-Gratia, Performance bonus, Joining Bonus, Client Bonus, Shift All, LTA, unclaimed Flexi Balances) would be paid through salary as fully taxable components and entire tax arising on the same would be deducted in the month of payment itself.
Employees gets daily e-news “HCL Today” to Inbox and also displayed on myhcl home page. All important ES announcements like tax proof collection, flexi cycle completion are done through HCL Today only.
It’s a good practice to read “HCL Today” news not to miss important announcements.

19. Point of Contact for Income Tax Queries
Contacts – HCL Tech
Location
Name
-id
Bangalore
Prasad Das
Chennai
Vivek Pullisery
Noida
Akhilesh Thakur
Contacts – Infra
Location
Name
-id
Bangalore
Rakesh Rakhecha
Chennai
Noida

20. Thank you