Tata Consultancy Services (TCS) has said no employee has faced a reduction in gross or net salary following its latest annual appraisal cycle, in response to growing concerns among staff over revised compensation letters, gratuity exclusions and changes linked to India’s new Labour Codes. The clarification came after employees raised questions about lower cost-to-company figures, downgraded performance bands and changes to take-home salary structures.
“There has been no reduction in employees’ gross pay or net pay,” a TCS spokesperson told The Times of India.
The debate centred on the exclusion of gratuity from CTC calculations under TCS’ revised compensation framework. According to The Times of India, several employees questioned why gratuity was excluded from their latest CTC breakup and whether the new structure effectively reduced their compensation. Some staff also alleged that monthly payouts had declined after variable pay adjustments and a restructuring of compensation components.
TCS said the revised salary structure was designed around three objectives: compliance with India’s new Labour Codes, standardisation of wage structures across its India workforce, and protecting employee take-home pay while maintaining flexibility for tax efficiency. The company also said employees comparing CTC across years should remove gratuity from previous calculations to make a “like-for-like” comparison.
Gratuity accruals themselves had actually increased under the revised framework because the calculation is now linked to wages rather than only basic salary, the spokesperson said, adding that employees would see higher gratuity values reflected in their payslips going forward.
The clarification arrives in the same week that TCS rolled out FY26 salary hikes, with baseline increments of 5 to 8% for junior and mid-level professionals and double-digit hikes for top-rated performers placed in the premium “A+” band. The two events together have triggered the most public scrutiny of TCS’ compensation framework in recent years.
