Why your take home salary may go down from April 2021 | Times Now Explains

As per the Code on Wages 2019 passed by Parliament in 2019, there is going to be a change in your salary structure from April 2021. It subsumed 4 laws that India had on wages hence bringing clarity on the definition of wages which will be the same for all employees and all employers across the country. As per the definition wages will have 3 components including basic pay, DA & retention allowance and all other components that you see in your payslip will not be a part of wages they will be a part of other components. As per the new Code, the total amount of your other components can’t be more than 50% of your total CTC, if it is more than 50% then the excess amount will have to be transferred to your wages category. This might lead to your basic pay going up on which PF is calculated, hence your monthly take-home may go down but your retirement corpus may increase.