Payroll calculations usually constitute 4 main components – Basic pay, Allowances, Deductions, and IT Declarations.
Gross Pay is the sum of Basic pay + Allowances.
Net Pay is the difference between Gross Pay – (Deductions + Total TDS). Total TDS is the sum of TDS, Surcharge, Health & Education Cess.
Basic Pay is 50% of Gross salary (Gross * 0.5)
The amount received as the HRA from the employer. Actual rent paid less 10% of the basic salary and 50% of the basic salary if staying in a metro city and 40% in a non-metro city.