New Labor Law: Less In-Hand Salary, More Future Security

• The new labor law mandates basic salary to be at least 50% of CTC, leading to a slight decrease in in-hand salary.
• Increased basic salary will result in higher PF deductions, strengthening retirement savings through compounding.
• Gratuity and leave encashment values will also increase, providing greater financial benefits upon job exit or retirement.
• A larger portion of CTC becoming basic salary means slightly higher tax deductions as many allowances were previously tax-free.
• Employees over 40 years old will receive a free or subsidized annual health check-up, enhancing health benefits.

Why It Matters: New labor laws reduce immediate take-home pay but significantly boost long-term financial security and health benefits.