I read quite a bit about how basic pay component being high or low impacts take home and benefits:

Higher basic pay component benefits in long term in terms of PF, Gratuity and other benefits calculated on basic pay. But, you get hit on taxed because the entire basic.

So my question is: what is a good percent for the basic component in the CTC to get for each bracket i.e. 10% (2 to 5 lacs), 20% (5 to 10 lacs) and 30% (above 10 lacs)

And people with considerably high salaries in the 30% bracket.


what is a good percent for the basic component in the CTC to get for each bracket

There is no such percentage. All the components need to be looked in entirety. For example if there is NO Flexible benefit plan in the salary, then Higher or Lower Basic is not much relevant. It also depends on individual preference. More take home vs forced savings via long term PF lock-in.

Most companies factor in the PF both company contribution as well as Employer contribution. To this extent having a higher Basic results in higher tax exemption of the Company contribution, but less take home.

Yes Gratuity is definitely an aspect and higher the basic higher the gratuity.

  • Thanks for the response. Of course, there is no defined values for the nice-to-have percentages in each bracket. But considering all components you mentioned are there in the package. What should one prefer in terms of the basic pay percent. – AndroidMechanic - Viral Patel Aug 26 '16 at 12:15

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