Which of the following is a deduction in the computation of salary of an employee?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Provident Fund.
Provident Fund is a deduction in the computation of salary of an employee.
Provident Fund (PF) : It is a statutory deduction, as part of social security. It is decided by the Government under the Provident Fund Act and is computed as a percentage of (Basic Pay + Dearness Pay, if applicable).
OTHER OPTIONS
- Dearness Pay (DP) : It is that portion of Dearness Allowance, which has been declared and deemed to have been merged with the Basic Pay.
- House Rent Allowance (HRA) : It is an amount paid to facilitate employee in acquiring on lease of residential accommodation.
- Transport Allowance (TRA) : It is an amount to facilitate commuting to the the place of work, i.e. Delhi, Bhopal, Haridwar, etc.