EP962 – Does The New Wage Code Need To Be Reviewed? | India Development Debate
23 DECEMBER 2020 | ET NOW | 15 MIN 03 SEC
Decoding new labor laws; What has changed? Usually, salaries are structured to increase allowances for tax purposes. Currently, the basic salary is on an avg 25-40% of CTC. Now basic salary for calculation of retirement will have to be 50% of CTC. Allowances cannot be more than 50% of the total CTC. Any extra under allowances should be plowed back to basic. Retirement benefits will be calculated on basic. What are the implications? Higher cost for companies, more retirement benefits, better social security and welfare benefits, lower take-home salary, and possibly higher taxes. Watch the full debate with Tamanna Inamdar, MS Unnikrishnan, Chairman, CII National IR Committee & Nitin Sethi, CEO- Performance & Rewards, Aon India on India Development Debate.