With the beginning of the new financial year, there is going to be a big change in your salary. It is expected that the new wage code of the central government will come into effect from April 1, 2021. Due to this, there can be a big change in the salary structure of most of the people working on salary in India.
Last year, the Parliament of India passed the new wedge code, after which the new rules can come into effect from the first day of the new financial year. If it is implemented from April 1, then Indian companies, employers can see a big change in the components like take home salary, provident fund, gratuity, pay slip of their staff. Due to this, the balance sheet of Indian companies is also likely to be affected.
The new wage code of the Government of India can have an impact on both government and private sector jobs. According to the new definition of salary, the allowance can be only 50% of your total salary. If we talk about the staff of the private sector, then in the new financial year starting from April 1, their basic pay component can be 50% or more of their total salary.
Basic pay for government staff also means basic pay and DA. Together, both should be 50% or more of the total salary. As soon as the new pay code comes into force, the salary you get in your hands can be cut, although your future will be more secure, because your contribution to PF will increase.
According to the new wage code, the salary of your basic salary, dearness allowance and components like retaining allowance should be half of your total salary. At this time, companies keep the basic salary in CTC at 35 to 40 percent of your total salary, companies will not be able to do so if the new Vaj Code is implemented.
When basic pay is high, your contribution to PF will increase. With this, you will contribute more every month in both PF and gratuity. Due to this, despite the increase in salary, your take home salary may be reduced. Take-home salaries can reduce by 25-30 per cent due to new salary re-structuring for those who get less salary.
At this time, allowances in the structure of people earning more salary are up to 80 percent. After the implementation of the new wage code, the take home salary of such people may decrease.