Salary Structure Bank Probationary Officer

Salary Structure of Bank Officer Scale II:
1. Basic Pay or Basic Salary: Basic Salary is the most important component of the Salary. It is that amount which an organisation pays to an employee before any allowances are added or taken off. It forms the largest chunk of the salary and is taxable under Section 17 of Income tax act. EPF(Employee Provident Fund) and HRA are linked to Basic Salary.
2. Allowances: These comprise of amounts given to cover additional expenses incurred. They are given as a percentage of basic salary. Most common types of allowances for Banks and other PSUs are listed below:
(a) Dearness Allowance (DA) : It a cost of living adjustment allowance paid to Government and Public sector employess (PSU). In banks it is revised on a quarterly basis (i.e.every three months) based on the Consumer Price Index (CPI) which decides the inflation of the quarter. Hence Dearness allowance is proportional to inflation. Basically higher inflation means more DA and vice versa.
(b) House Rent Allowance (HRA) : The House Rent allowance is given to the employee to meet the rental expenses for his/ her accommodation. According to Income Tax Act, Section 10 (13A) and Rule 2A of the Income tax rules, the employee is exempted from paying tax on HRA.
The exemption is the least of following:

  • Actual house rent allowance received from the employer.
  • Actual house rent paid minus (10% of the basic salary + DA) .
  • If living in a metro(Delhi, Mumbai, Kolkata or Chennai), then 50% of basic salary
  • Else it is 40% of the basic salary