8th Pay Commission Latest Update: These days, discussions regarding the 8th Pay Commission seem to be increasing rapidly in the entire country. Different employee organizations are demanding salary, allowances and other major changes from the central government.

Many suggestions have also been given to the government by the organizations. If these proposals are approved by the government, it could prove to be the biggest change in the salary structure of government employees in the last few years. Let us know about this.

Demand for major changes in salary structure

‘Pragatisheel Shikshak Nyay Manch’ (PSNM), an organization of government teachers of Union Territories, has demanded changes in the entire system of salaries and allowances.

The organization has said in its proposal that the minimum basic salary of Level 1 employees should be increased from Rs 50,000 to Rs 60,000. This is much more than the basic salary of Rs 18,000 available under the current 7th Pay Commission.

Emphasis on fitment factor and increment

• The union has suggested increasing the fitment factor from the current 2.57 to between 2.62 to 3.83. Also, a demand has been made to increase the annual increment from 3 percent to about 6-7 percent.
• The organization says that these changes are necessary in view of inflation. These changes will increase the income of employees.

Demand to increase salary 4 times

1. Bharatiya Immunity Mazdoor Sangh (BPMS) has demanded to increase the minimum basic pay to around Rs 72,000. This is 4 times more than the current level.

2. Along with this, there is also a demand to increase the fitment factor to 4. It has also been suggested to increase the maximum salary for top level posts to Rs 10 lakh. If the central government accepts these suggestions, we may see a significant increase in the salaries of central employees.

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Salary Structure change from 1 April: There is big news for employed people. The new financial year is going to start from 1st April. During this period, some changes may be seen in the pay slips of salaried employees. Actually, the new Income Tax Act 2025 and the new Labor Code are going to be implemented from April 1, 2026. With this, you will see some important changes in your salary structure and take home salary.

What will be the change?

• According to the new labor code, your basic salary should be 50 percent of the total CTC. Currently, many companies keep the basic salary low to save tax and increase allowances like HRA, Travel Allowance and Special Allowance by 70-80 percent. But now under the new rule, companies will not be able to keep more than 50 percent of the total salary including all the allowances.
• Now, since your PF and gratuity is calculated on the basis of your basic salary, if the basic pay increases, your retirement fund and your contribution on it will also automatically increase.
• Excessive deduction of PF will affect your take home salary. Due to excessive deduction of PF, the salary in hand may be less. However, it will also depend on the existing structure of the companies. That means, the effect of keeping 50 percent on basic pay will depend on how much basic salary your company has fixed at present. For example, if currently your CTC is Rs 50000 and basic pay is Rs 25000 (50 percent), then the new rule will not affect you. Your in-hand salary will remain the same. Yes, if your total salary is Rs 50000 and to save tax the company is giving you only Rs 10000 (20 percent) as basic pay and is adding the remaining Rs 40000 as allowance, then in this situation the company will have to increase your basic pay.
• Increase in basic salary may increase tax liability in some cases. According to income tax rules, the HRA exemption you get is based on your basic salary. As the basic salary increases, the deductible portion of your rent (10% of basic pay) will increase. This will reduce the tax exemption of HRA. It is worth keeping in mind here that the old tax system has not ended yet. Those whose annual income is between Rs 10-30 lakh and who live in metro cities and have to pay more rent or are paying higher amount in home loan can take advantage of schemes like 80C and NPS to save tax.
• There is less fear of tax increase for those choosing the new tax regime because under the new tax regime, income up to Rs 12.75 lakh is tax free. There is no exemption on HRA or other allowances in the new regime. In this, including the standard deduction of Rs 75,000, those earning Rs 12.75 lakh annually will have to pay zero tax. In such a situation, increasing the basic salary will not have any bad effect on your tax calculation.

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