Final placement interviews are almost here.

Decisions that you make now

are very crucial, as this will have a significant impact on the career choices
that you make in the future. If you are currently picturing yourself as an HR
manager, then you should start preparing your CV and be interview-ready.
In order to rock an HR interview one needs to have conceptual knowledge
of the HR world and how it functions. In this article, we will give you
detailed information on roles in HR, basic concepts that you should know,
the research you need to do to stay fully prepared for the interview and
more. Read on...
 
HR Job Roles

There are a plethora of job roles for MBA students who want to pursue a

career in Human Resources Management. Some of the popular ones are:

1. HR Generalist: They are entry or mid-level HR managers. They do a

variety of things like collecting job applications, evaluating resumes,
planning recruitment drives, employee engagement activities, etc.
2. Global HR Specialist: They manage HR roles on the international
level. This includes recruiting, interviewing, placing current
employees overseas, helping them in the transition, etc. For this, you
must have linguistic skills, tax and legal skills, cross-cultural fluency
and be business savvy.  
3. Talent Acquisition Manager: The job title and even the use of the
term Talent Acquisition, is relatively new. Talent Acquisition
Manager’s work entails attracting, sourcing, recruiting, interviewing,
pre-boarding and on-boarding employees to an organization. It is a
part of the corporate recruiting process and works within the HR
department.
4. Staffing Director: They are high ranking HR managers. They take
crucial decisions for the management of current employees. They
play an important role in forming promotion policies, recruitment
needs, transfers, training etc.
5. Employee Relations Manager: They are responsible for maintaining
a conflict-free relationship between employees, trade unions and
company management. They have to also organise meetings
for suggestions and feedback from employees and trade unions
regularly. In these meetings, they address complaints, grievances
and settle disputes among managers, employees or even the
company internally.
6. Training & Development Manager: They are generally medium or
top-level managers, who are responsible for designing, structuring
and delivery of training to both new and existing employees. They
make sure that the training and development sessions that are being
conducted in the organisation are useful and productive for the
 participants. They make sure that the ROI of these trainings are
beneficial to employees and profitable for the company in terms of
productive and engaged employees.
7. Compensation Manager (Benefits Specialist): They are middle-
level HR manages who makes plans, analyses and figure out the
salary of existing and new employees in the company. This includes
salary, bonus, etc. They also ensure that employees continue to stay
motivated by their pay, are satisfied with their benefits (both
monetary and non-monetary) and regular salary increases while
maintaining costs on wages.
Hide

 
Basic concepts

Knowledge and in-depth understanding of the following concepts is a must

to crack an HR Interview - 
Labour Laws:  As a future HR manager, it imperative that you know and
understand all the applicable employment laws that protect the rights of
employees. It is your duty to make the employees aware of their rights
while helping the companies avoid lawsuits, fines and legal expenses.
Hence, before the interview, try to revise all the labour laws specifically the
ones related to discrimination and harassment, worker health and safety,
industrial disputes, contract labour, factory act (1948), payment (including
wages), health and retirement and unpaid leaves. Most common questions
that are asked by interviewers are: 

 Which establishments are covered by the Industrial Employment

(Standing Order) Act, 1946?
 Does a workman receive any compensation if he is suspended,
pending enquiry?
Organisational Behavior: One of the most underlying yet important jobs
of an HR is to drive employee engagement and providing employees with
the good employee experience. As an HR, it is your role to help
managers to effectively manage their employees. For this, the HR
Department might also have to come up or design various employee
engagement activities that inspire and motivate them to work with higher
efficiency and increase productivity at work. The theories that you need to
brush up for this are - Maslow’s Hierarchy of Needs, McGregor’s Theory X
and Theory Y, Herzberg’s Motivation theory and Vroom Expectancy theory.
However, knowing just the theories will not do the trick. You need to know
their practical implications too. Some of the most common questions asked
on this are:

 Where does a factory worker and a CEO fall in Maslow’s Hierarchy of

Needs?
 If you are a leader in one of the departments of your college, tell us
how will theory X or theory Y play out for you when you are leading
them?
 Why does the IT sector experience such high attrition rate? Explain
using the theory of motivation.
 Map Vroom’s Expectancy Theory for the IT support staff of Cisco
system (or any big IT firm).
Compensation: Good compensation and benefits programs attract top
talent and help in retaining valued employees. Hence, the work of HR in
this area is crucial. The role involves benchmarking, ensuring current
documentation, and strategizing compensation and benefits with
performance. So, you need to know everything related to reward criteria,
compensation philosophy, job analysis, etc. Some of the commonly asked
questions based on this concept are - 

 Enumerate steps involved in creating a compensation system. 

 Explain how stretch goals play a role in motivating an employee.
Learning and Development: HR’s job is to plan, administer and find
prospect programs that ensure that employees have the required skills and
knowledge to compete with the outside world while meeting the
organization's business objectives. For this, you need to truly understand
the concept of behaviourism (classical and operant conditioning), TNA and
Kirkpatrick Model. The kind of questions they might ask you are - 

 Our marketing department handles a lot of merchandise on a daily

basis. We get this merchandise made for our trade partners, clients
and contest winners. However, employees have a tendency of trying
to trick or flick some of these merchandise without even mentioning.
How do you eradicate such behaviour?
 Explain how you will go about conducting TNA for our business. We
want our accounts department to go digital. 
 What are the different levels of training evaluation? 
  How can you determine if a training program should be conducted or
not?
 
Interview Prep

1. On the very basic level, brace yourself with questions related to the
points you have mentioned in your resume. Try to focus on your
profile and past work experience. If you have an interesting hobby,
mention it. Highlight your extracurricular activities and definitely have
a mindblowing answer for, “So, tell me about yourself?”
2. You need to know your concepts. They will expect you to be well-
versed with the HR concepts like - Labour Laws, Organisational
Behavior, Compensation (Benefits) and Learning and development. 
3. Be up-to-date with the latest news and developments that are
happening in the HR domain. You need to analyse these changing
trends and their impact on an HR professional.  For this, you need to
read at least one business newspaper daily. 
4. Lastly, you should do thorough research on the company you are
applying for. Do a little more digging online or talk to a person
(alumni) in the company and get a broad understanding of their work
culture, CSR initiatives, etc. 
SALARY

Terms like CTC, basic salary, gross salary, allowance,

reimbursements, tax deductions, provident fund, insurance,
etc. often create confusion for employees. In this blog, we
have attempted to delineate all the terms associated with the
salary in order to make it simpler for you.

Read more to understand salary breakup and the various

terms associated with it.

You can also calculate in-hand salary with the help of

this Take-Home Salary Calculator.
Also Read: 5 Hacks to Get a Higher Salary Package at Any
Company.

CTC

CTC or Cost to Company is the total amount that a company

spends (directly or indirectly) on an employee. It refers to the
total salary package of the employee. CTC is inclusive of
monthly components such as basic pay, various allowances,
reimbursements, etc. and annual components such as
gratuity, annual variable pay, annual bonus, etc.

CTC is never equal to the amount of take-home salary of the

employee. There are many components in the CTC that one
does not receive as part of take-home salary.

CTC = Gross Salary + PF + Gratuity

Let us now discuss common salary components:
Recommended Read: Work-Life Balance vs Salary Offered- How
to Choose Between the Two?
 Basic salary

Basic salary is the base income of an individual. It is a fixed

part of one's compensation package.

A basic salary depends on the employee’s designation and

also the industry in which the employee works.

Gross salary

Gross salary is the amount calculated by adding up one's

basic salary and allowances, before deduction of taxes and
other deductions. It includes bonuses, over-time pay, holiday
pay, and other differentials.

Gross Salary = Basic Salary + HRA + Other Allowances

Net salary or take-home salary

Net salary or take-home salary is obtained after deducting

income tax at source (TDS) and other deductions as per the
relevant company policy.

Net Salary = Basic Salary + HRA + Allowances - Income Tax -

Employer's Provident Fund - Professional Tax

Allowances

An allowance is an amount received by the employee for

meeting service requirements. Allowances are provided in
addition to the basic salary and vary from company to
company. Some common types of allowances are discussed
below:

 HRA or House Rent Allowance: It is an amount paid out to

employees by companies for expenses related to rented
accommodation.
 Leave Travel Allowance (LTA): LTA is the amount provided
by the company to cover domestic travel expenses of an employee.
 It does not include the expenses for food, accommodation, etc.
during the travel.
 Conveyance Allowance: This allowance is provided to
employees to meet travel expenses from residence to work.
 Dearness Allowance: DA is a living allowance paid to
employees to tackle the effects of inflation. It is applicable to
government employees, public sector employees, and pensioners
only.
 Other such allowances are the special allowance, medical
allowance, incentives, etc.

Reimbursements

Occasionally, employees are entitled to several

reimbursements like medical treatments, phone bills,
newspaper bills, etc. The amount is not received in the salary,
but on submission of the bills, reimbursement is given.
Generally, there is an upper limit for every category of
reimbursement.

Employer Provident fund/EPF or Provident Fund

Provident fund is an investment both by the employer and the

employee each month, the lump sum amount of which acts as
an employee's retirement benefits scheme.

Provident fund contribution is mandatorily either of the

following:
Case 1: Basic salary < 15000 (per month)
12% of the basic salary

Case2: Basic salary > 15000 (per month)

In this case the company has an option to either contribute
12% of 15,000 (i.e. 1800) or 12% of Basic salary.

It is directly deposited in the employee’s PF account. You can

check your balance here.
Hence, 12% of the basic salary gets contributed by the
employee and another 12% by the employer. Usually, the
contribution from the employer can only be seen in your offer
letter and not in the payslip. Contribution from your salary is
called EPF and it can be seen in the payslip. Contribution to
the provident fund is mandatory for Indian companies.

Public provident fund or PPF

PPF is a voluntary contribution by the employee and is

completely controlled by him/her. The employer has nothing
to do with a PPF account.

This amount is not mentioned in CTC or pay slips, however, if

an employee presents it as an investment for tax saving
purpose, it will be shown on Form 16.

People open PPF account for two main reasons - one is for tax
saving purpose and second for long-term investment. PPF
provides 7.6% per annum (compounded annually) and more
importantly, both the contribution and maturity amount is
tax-free.

Do not confuse this with Employer's PF contribution.

Form 16

The company issues a Form 16 which contains the details

about the salary earned by the employee and the amount of
tax deducted.
The taxpayer is required to submit Form 16 to file the Income
Tax returns every financial year. It acts as the proof of his/her
income and tax paid to the government.

Gratuity

Gratuity is the part of the salary that is received by an

employee from the employer for the services offered by the
employee upon him or her leaving the job.
Though an employee can receive the gratuity amount only
after 5 years, it will be deducted by the employer every year
and hence it will get deducted from your CTC.

Life insurance and health insurance

Many companies provide health insurance and life insurance

to their employees, the premium for which is borne by the
employer and is included in the CTC. Hence it has to be
deducted while calculating your take home salary.

Let us understand income tax and how it is related to salary

income and salary components.

Income tax

The tax levied on one’s personal income is called income tax.

Usually, an employee gets his or her salary after the tax
deduction by the employer. This process is called as Tax
Deduction at Source (TDS). The deducted tax amount is paid
to the government by the company.

Professional tax

Professional tax is the tax charged by the state government in

order to let an individual practice a certain profession. The
maximum amount payable per year is INR 2,500. It depends
on one’s monthly salary and also on the state in which one
works. The professional tax levied varies from state to state in
India.

Professional tax is not applicable in the following states and

union territories:

Arunachal Pradesh, Andaman & Nicobar, Chandigarh, Dadra

& Nagar Haveli, Daman & Diu, Delhi, Goa, Haryana,
Himachal Pradesh, Jammu & Kashmir, Lakshadweep,
Nagaland, Punjab, Rajasthan, Uttarakhand, and Uttar
Pradesh.
 Take a look at the professional tax slab in India (Statewise).

How to calculate your take-home salary?

We have provided some easy steps to help you calculate your

take-home salary, also known as in-hand salary and net
salary.

In order to Calculate take-home salary, subtract the Income

Tax, Provident Fund (PF) and Professional Tax from the
Gross Salary.
Step 1: Calculate gross salary

Gross Salary = CTC – (EPF + Gratuity)

Step 2: Calculate taxable income

Taxable Income = Income (Gross Salary + other income) –

Deductions

In order to determine the part of your income that is taxable,

subtract allowances (LTA, Conveyance Allowance, HRA),
professional tax, medical bills, medical insurance, tax saving
investments, if any and other deductions from your gross
salary.

Calculating income:
To calculate income-tax, include income from all sources such
as:

 Salary (salary paid by your employer)

 House property (rental income, or interest paid on home loan)
 Capital gains (income from sale purchase of shares or house)
 Income from any business/profession
 Other sources (saving account interest income, fixed deposit
interest income, interest income from bonds)
Deductions:
 1. HRA
HRA received is not fully exempt from tax. HRA that you can
claim is the lowest of the following:
 The total amount received as the HRA from the employer in
the financial year.
 Actual rent paid in the year – 10% of the basic salary in the
year.
 50% of the annual basic salary if staying in a metro city or
40% of the annual basic salary if staying in a non-metro city.
2. Standard deduction
In Budget 2019, a standard deduction of Rs 50,000
(annually) has been introduced. Before this, there was a
transport allowance of maximum INR 19,200 (annual) and
Medical allowance of maximum INR 15,000 (annual), which
are no longer applicable.
3. LTA
Travel cost can be claimed for tax exemption under Section
10(5), twice in a block of four years. LTA covers only domestic
travel, and the amount is provided on submission of actual
bills.
Please note that some components of the salary such as
medical reimbursements, telephone bills reimbursement, etc.
are exempt from the tax deduction.

Deductions are generally divided into the following sections:

SECTION NATURE LIMIT

Basic deductions
80C from total income 1,50,000

Rs. 10,000 on interest, available to an individual and HUF,

Interest from deduction allowed on interest earned from a savings account
80 TTA deposits with a bank

50% of the donation made is allowed to be deducted from the

Donations to taxable income. However, if the amount is more than 10% of
80 G charity the gross total income, the excess will be ignored.
 SECTION NATURE LIMIT

80 E Educational loan deduction allowed on total EMI part, no limit

Allowed on interest paid on home loan up to maximum Rs

80 EE Home loan interest 50,000 per financial year.

For self and family- Rs 25,000, For self and family and
Medical insurance parents- Rs. 55,000, For self and family and senior citizen
80 D premium parents- Rs. 80000

Step 3: Calculate income tax**

Once you have taxable income, you can easily calculate

income-tax by referring to the income-tax slab and rates
provided below:

Tax slab
The income tax rate is levied based on a slab system under
which individuals pay taxes at different rates basis their
income slab.

Income tax slabs are revised every year during the budget
keeping in mind the individual taxpayers.

According to the budget announcement for the FY 2019-20,

tax slab for male and female Indian resident individuals
below 60 years of age is as follows:

Health and Education

Net Income Income Tax Cess

Up to Rs. 5 Lac Nil Nil

Rs. 5,00,000 - Rs.

10,00,000 Rs. 12,500 + 20% on income above 5 lac 4% of income tax

Rs. 1,12,500 + 30% on income above 10

Above Rs. 10,00,000 lac 4% of income tax
 *Surcharge @10% will be applied for taxable income between
Rs. 50 lac to Rs. 1 crore and @15% for taxable income above
Rs. 1 crore.

But with the new budget announced on February 2, 2020,

taxpayers can now choose between the current and new tax
regime.

Individual taxpayers have a choice between

 The current tax regime with existing income tax deductions

and exemptions.
 The new income tax regime with lower tax rates and fewer
exemptions.
As proposed in the Budget 2020-21, the new tax regime offers
slashed income tax rates to lower the amount of tax paid,
simultaneously eliminating certain deductions and
exemptions.

As per the revised tax regime, tax slab for individuals below
60 years of age is as follows

INCOME TAX SLAB TAX RATE

Upto Rs 2.5 lac Nil

Rs 2.5 lac to Rs 5 lac 5% (Rs 12,500 tax rebate per section 87A)

Rs 5 lac to Rs 7.5 lac 10 %

Rs 7.5 lac to Rs. 10 lac 15 %

Rs 10 lac to Rs 12.5 lac 20%

Rs 12.5 la to Rs 15 lac 25%

Rs 15 lac and above 30%

 The amount of tax will be subject to 4% education and health cess
A taxpayer choosing the new tax regime will have to give up
the following deductions and exemptions:

1. HRA (House Rent Allowance)

2. LTA (Leave Travel Allowance)
3. Relocation allowance
4. Professional Tax
5. Housing loan interest (Section 24)
6. Education allowance
7. Helper allowance
8. Special allowances [Section 10 (14)]
9. Standard deductions
10. Chapter VI-A deduction (Except section 80CCD(2) and
80JJA)
11. Conveyance
12. Daily expenses during the employment term
Calculate exact in-hand salary with the help of our free take-
home salary calculator.
Step 4: Calculating in-hand/take home salary

Take Home Salary = Basic Salary + Actual HRA + Special

Allowance - Income Tax - Employer’s PF Contribution(EPF)

Example:

Let's take an example to understand how to calculate take-

home salary:
Meera's CTC is Rs. 16,00,000. Other salary components of
her salary structure are metioned below:

SALARY COMPONENTS AMOUNT (ANNUAL) AMOUNT (MONTHLY)

CTC 16,00,000 -
 SALARY COMPONENTS AMOUNT (ANNUAL) AMOUNT (MONTHLY)

Basic 6,40,000 53,332

HRA 3,20,000 26,666

EPF 21,600 1,800

Sec 80C Investment 1,00,000 8,333

Leave Travel Allowance 20,000 1,666

Special Allowance 5,75,324 47,943

Gratuity 23,076 1,923

Professional Tax 2400 200

Note:
*This is up to Meera to decide how much she wants to invest
and claim under section 80C. The maximum deduction
possible is 1,50,000. EPF amount also comes under section
80C.
We have assumed that Meera pays INR 30,000 per month as
her rent.

DA is assumed to be zero because Meera is a private sector

employee.

Step 1: Calculating gross salary

Gross Salary = CTC – (EPF + Gratuity)

Gross salary= 16,00,000 – (21,600 + 23,076)

Gross Salary = INR 15,55,324

Step 2: Calculating taxable income

First, calculate the HRA deduction that you can claim:

HRA that you can claim = Minimum of (Actual HRA, Rent
paid - 10% of basic, 50% of Basic for metro city)
= Minimum (3,20,000 , 3,60,000 - 10% of 6,40,000, 50% of
6,40,000)
= Minimum (3,20,000, 2,96,000, 3,20,000)
= 2,96,000

Taxable Income = Gross Salary – Section 80C deduction –

Standard Deduction – HRA – Professional Tax

Taxable Income = 15,55,324 – 1,000,00 – 50,000 – 2,96,000

– 2,400

Taxable Income = 11,06,924

Step 3: Calculate income tax

Based on the slab rates announced in the FY 2019-20:

Income Tax = 112500 + 30% of (Taxable Income - 100000)

Income Tax = 112500 + 30% of 1,06,924
Income Tax = 1,87,347
Cess = 4% of Income Tax

Net Tax = 1,87,347 + 7494= 1,94,841

Step 4: Calculating in-hand/take home salary

Take Home Salary = Gross Salary – (Income Tax +

Professional Tax)
Take Home Salary = 15,55,324 - (1,94,841 + 2,400)

Take Home Salary (Annual) = INR 13,58,540

Take Home Salary (Monthly) = INR 1,13,212

Some common queries:

1. When and how much gratuity do you get paid?

In India, the basic requirements for gratuity are set out under
the Payment of Gratuity Act 1971.
 Note: To fall under the Act and qualify for gratuity, an employee
needs to have at least five full years of service with the current
employer, except in the event that an employee passes away or is
rendered disabled due to accident or illness, in which case gratuity
must be paid.
Gratuity = [ (Basic monthly salary + D.A) x 15 days x No. of years
of service ] / 26
Here, basic monthly salary is the last month's basic pay at the
time of leaving.

2. How to see my PF Balance?

Follow the below-given steps for downloading UAN passbook.

1. Click here for downloading PF passbook.

This facility is to view the Member Passbook for the members
registered on the Unified Member Portal. Passbook will be
available after 6 Hours of registration at Unified Member
Portal.

2. First time when you login on above website it will show

Invalid login credential. Then try after 2 days. When you will login
after 2days it will show passbook will be available after 4days.
After 4 days when you will login download passbook copy.
· Your Username would be your UAN number (It is printed on
your salary slip)
· Password (which is you have generated at the time of UAN
activation)

3. What is the difference between Financial Year and Assessment Year?

Financial year (FY)

A financial year is a year as reckoned for taxing and
accounting purposes. It commences from April 1 of a year and
ends on March 31 of the following year. In the case of filing IT
returns, financial year is the previous year. It is the year in
which one has earned the income. Hence, if you are filing a
return this year, that is 2018, the financial year will be 2017-
18.

Assessment year (AY)

Assessment year, on the other hand, is the year in which you
file your returns. It is the year in which the income that you
have earned in the financial year will be evaluated. For
example, if you have earned your income between 1 April
2016 and 31 March 2017, then 2017-2018 will be the
Assessment Year. Hence, it is the year in which your tax
liability will be calculated on the previous year’s income.

Income year Financial Year Assessment Year

2015-2016 2015-2016 2016-2017

2016-2017 2016-2017 2017-2018

2017-2018 2017-2018 2018-2019