If you think that your entire salary is taxable, then that is not true. The overall package, which is termed as CTC, comprises many allowances. While calculating taxes, employees must know which allowance in the salary slip is actually taxable because there are certain other allowances which may be tax-free or fully or partially exempted in the hands of an employee. Here are ten components which you generally see in your salary slip, but do not know the various tax implications occurring on the overall package. One should be aware of the exact taxable salary which he\/she is drawing from one's respective employer. Basic Salary Your salary is divided into various components. Basic salary is one of the important components of a salary because various other components are dependent on it in terms of percentage or the other. It is a fixed component in your pay slip and forms the basic part of the salary. It forms a large portion of your total annual salary. HRA is mostly calculated as 40% \/50% of the basic salary whereas PF is calculated at 12% of the basic salary. You may also watch: [jwplayer Y99AJMHK] House Rent Allowance HRA, which is part of the basic salary, is fully or partially exempt from taxes. Salaried individuals who live in a rented house can claim HRA to lower their taxes. If you are not living in a rented house then your HRA is fully taxable. Dearness Allowance: Dearness Allowance (DA) is an allowance paid to employees as a cost of living adjustment allowance. The allowance is paid to the employees to manage the inflation. DA is fully taxable with salary. The income tax act clearly specifies that tax liability for DA will be calculated along with salary. It should be declared while filing your income tax returns. Conveyance Allowance You do not have to provide any document of conveyance allowance from your employer. The total amount of Rs1600 per month or Rs 19200 per annum can be claimed as tax exemption under this allowance. It is given to employees to meet their daily routine expenses travelling from your home to work. The limit was doubled in the budget 2015. Earlier it was Rs 800 per month. You may also watch: [jwplayer 9i4ftTBR] Special Allowance After doing all the allocation of your salary into various components, you may see a component as 'special allowance' which is fully taxable. This allowance can include any amount as it is taxable. This allowance is used by the company to formulate the salary of an employee. Bonus There are various kinds of bonuses like annual bonus, semi-annual bonus, performance bonus, festive bonus, etc. It is usually paid on the occurrence of an event, semi-annually or annually. Bonus, paid to the employee by any name, is fully taxable. Medical Reimbursement If your medical bills have not exceeded Rs.15000 in a particular financial year, then that particular reimbursement claimed by salaried employees are not taxable adhering to certain terms and conditions. For claiming reimbursement, you need to submit bills to your employer. The expenses as mentioned in the bill should be in relation to the consultation of doctor, medicines, medical tests etc. Employee Contribution to PF It is one of the important components where both employer and employee contribute 12% of the employee's basic salary every month toward employees provident fund. The higher the basic salary, the more EPF will be accumulated every month for your retirement. The accumulated money also earns compounded interest over it. This saving over a time period helps in generating good corpus or retirement. You may also watch: [jwplayer HJV8vZLr] Leave Travel Allowance The exemption is provided for short distance trips mainly within the country itself. This allowance can be claimed for going on a trip with a spouse, children and parents, but not relatives or friends, etc. you need to submit the bills, tickets, all the actual expenses occurring during the journey to your employer to claim for this particular exemption. Overtime Allowance Nowadays most of the companies are running 24x7 where employees, sometimes or as per the employer's requirement, have to do overtime and for doing so they are being paid extra amount. This extra amount is showed as overtime allowance in the pay slip of employees working over and above the regular work hours. The allowance received through overtime allowance is fully taxable under the IT Act.