Until recently, conversations for salaried taxpayers centred mainly on outgo and choosing between the new and the old regime. However, with the notification on the implementation of the New Labour Codes, effective Nov 21, 2025, benefits such as gratuity and Provident Fund (PF) are now becoming central to these conversations.
A key change is the revised definition of ‘wages’, which forms the base for statutory benefits. Wages include all remuneration such as basic pay, dearness allowance and retaining allowance, after excluding specified components like HRA, conveyance allowance, employer’s contribution to PF, housing and utilities, medical attendance and other specified components. These exclusions are capped at 50% of total remuneration, with any excess added back to wages, potentially increasing gratuity under the Code on Social Security, 2020.
