Finance

Awareness Fridays: Understanding Your Salary Slip and Income Tax Computation

Over the years, I have observed that a significantly high number of employed people (colleagues, friends, and acquaintances) have very little to no understanding of how their monthly salary is computed. Therefore, they have no idea if what they’re receiving each month as salary is correct or not. More often than not, they’re simply happy that they’re receiving a certain amount each month.

I’ve often popped a question or two and have always been responded to with dazed looks. In my opinion, it’s your obligation to intimately study your salary slip and income tax computation each month (most employers do provide these figures each month; if they don’t, it’s your duty to ask for one). Spend some time and work through the numbers — and if something doesn’t seem right or if you simply don’t understand something, just ask. A great side effect: you will become intimately familiar with personal finance terminology.

What are you waiting for? Open up your latest salary slip and income tax computation and work through the numbers. You might just figure out that you ought to be paid more each month.

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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