Continuing with my previous discussion:
I have a 6 digit CTC, a smaller gross salary, a 5 digit take home and a 4 digit basic salary.
To add to my confusion, I have small earnings via interest and stock-trading. Now these 2 components are essential when I want to compute my Net Worth, but they have no relation with the 45hr/week job which I do.
Now when someone asks me my salary I am totally confused what to say?
I follow a simple rule.
1) When IT asks for my salary (for PF, HRA, gratuity etc) I quote my basic.
2) When asked by a Head hunter I quote my ridiculous CTC.
3) When asked by a friend I want to impress, I even top it up with an extra stock earning to leave them extra dizzy.
4) When asked by my peer I quote my gross.
5) When asked by someone whom I owe money… it is always my humble take-home.
Can’t I live like a common man who says I earn Rs X and brings home Rs X. Why do I have to feel that every time I answer to this query I am lying or hiding something?
I am a strict follower of minimalism. I cheered when govt. introduced Saral to make my life simple. However can anybody tell me the significance of Basic salary and so many complicated structures? All my HRA, EPF, gratuity, leave encashment etc. is computed on Basic, but does it have a practical relevance?
For public/govt. sector, it is understandable that they have a basic salary and that is used to calculate all the allowances, perks, the seniority and rank. For private sector employees it is an artificial reverse engineering concept. They have the whole figure and then divide and subdivide it to come up with the basic (usually 40% of the gross) I won’t be surprised if someone has a basic pay of Rs 6457.45. (not a round figure)
Won’t it be simple if they simplify this and calculate everything on the basis of my gross? (K.I.S.S. Keep it simple, Stupid!)