Hi all seniors,
Please help me in this regard. Our employee strength is 15 now. We have not registered with PF or ESI. Now we want to take security and housekeeping on our roll. Is it necessary to pay them ESI or PF?
Please suggest me on this.
Thanks and regards,
Ashwini.
From India, Bangalore
Acknowledge(0)
Amend(0)
Please help me in this regard. Our employee strength is 15 now. We have not registered with PF or ESI. Now we want to take security and housekeeping on our roll. Is it necessary to pay them ESI or PF?
Please suggest me on this.
Thanks and regards,
Ashwini.
From India, Bangalore
Acknowledge(0)Amend(0)
Even if they are not under your payroll but are working in your establishment as outsourced employees or contract employees, they will be counted for the purpose of coverage of EPF and ESI. Bringing them under your payroll, therefore, will not make any difference.
Regards, Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
4483Regards, Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Hi Madhu, There is law saying mimimum 20 employees shuld be there to cover under PF.IS This rule is not applicable for ESI its based on salary limit. Thanks & Regards, Ashwini.
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
dear ashwin, if i am no wrong 20 or more without the aid of power. 10 or more with the aid of power. if u are using power then u have to do. with regards
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
dear all, i need u guys help .......... i m a bms grads and 6 months of expirienced in recruitment but now is looking out job i hr generalistic profile
From India, Vasai
Acknowledge(0)Amend(0)
From India, Vasai
Acknowledge(0)Amend(0)
Hi KSCC, My compny is in to software industry...is it applicable to permanenr employees also(who are in company roll).wthout the matter of salary. Thanks & Regards, Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Friends,
Under section 2(12) of the ESI Act, it is applicable to factories employing 10 or more persons, irrespective of whether power is used in the process of manufacturing or not. Furthermore, under section 1(5) of the act, the scheme has been extended to private medical and educational institutions employing 20 or more persons in certain states.
ESI COVERAGE AS ON 31ST MARCH 2010:
- Number of Insured Person Family Units: 1,43,00,000
- Number of employees: 1,38,96,150
- Total number of beneficiaries: 5,54,84,000
- Number of Insured women: 26,00,250
- Number of employers, etc.: 4,06,499
(Thanks to Business Manager - November 2010)
Regards,
Alphonse
From India, Madras
Acknowledge(0)Amend(0)
Under section 2(12) of the ESI Act, it is applicable to factories employing 10 or more persons, irrespective of whether power is used in the process of manufacturing or not. Furthermore, under section 1(5) of the act, the scheme has been extended to private medical and educational institutions employing 20 or more persons in certain states.
ESI COVERAGE AS ON 31ST MARCH 2010:
- Number of Insured Person Family Units: 1,43,00,000
- Number of employees: 1,38,96,150
- Total number of beneficiaries: 5,54,84,000
- Number of Insured women: 26,00,250
- Number of employers, etc.: 4,06,499
(Thanks to Business Manager - November 2010)
Regards,
Alphonse
From India, Madras
Acknowledge(0)Amend(0)
Dear Ashwini,
For PF coverage, 20 or more employees are required. In the case of a cooperative society, it is 50. For ESI, 10 or more employees are required with the aid of power, and 20 are required without the aid of power.
Thanks,
Manish
From India, Bangalore
Acknowledge(0)Amend(0)
For PF coverage, 20 or more employees are required. In the case of a cooperative society, it is 50. For ESI, 10 or more employees are required with the aid of power, and 20 are required without the aid of power.
Thanks,
Manish
From India, Bangalore
Acknowledge(0)Amend(0)
The words with power and without power are going to be deleted from the coverage applicability of ESI. Similarly, the EPF will soon become applicable to establishments employing 10 or more employees. For the purpose of ESI, the number of employees as 10 or 20, as the case may be, means employees drawing a salary of Rs 15,000 per month. But for EPF, the actual number of employees will be counted for coverage, though only those employees whose BASIC Salary + DEARNESS Allowance does not exceed Rs 6,500 will be covered.
In your case, since you already have 15 employees on the roll, any addition either by direct employment or through a contractor would lead you to coverage because for coverage, it is not only salaried employees but any labor involved payment, like payments made to casual labor, would be treated as employment.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
In your case, since you already have 15 employees on the roll, any addition either by direct employment or through a contractor would lead you to coverage because for coverage, it is not only salaried employees but any labor involved payment, like payments made to casual labor, would be treated as employment.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Hi,
It is for your kind information that as per Section 2(12) definition of "factory," it means any premises, including the precincts thereof, where ten or more persons are employed, but does not include mines and railways effective from 1st June 2010. For detailed knowledge, please go through Notification dated 25th May 2010 (attached).
From India, New Delhi
Acknowledge(0)Amend(0)
It is for your kind information that as per Section 2(12) definition of "factory," it means any premises, including the precincts thereof, where ten or more persons are employed, but does not include mines and railways effective from 1st June 2010. For detailed knowledge, please go through Notification dated 25th May 2010 (attached).
From India, New Delhi
Acknowledge(0)Amend(0)
Dear Ashwini R & All,
Please note the following:
1. Sec 2(12) has been amended - As per this, factories employing 10 or more have to cover employees under ESI.
2. PF remains to be 20 persons (if companies want to cover voluntarily even if the number is less than 20, they may do so).
3. Ms. Ashwini - as you say, your company has 15 persons. Even if their salary is above Rs. 15,000/-, as you already have 15 persons working, you may apply for ESI to cover your company under ESI.
4. You may hire security and housekeeping personnel even if you do not have ESI and PF coverage. However, it is better if you engage these persons under a contract agency that has ESI and PF coverage if you are really concerned.
5. If you hire these persons under your company's payroll, then your numbers will reach the eligibility limit for both ESI and PF if you are taking more than 4 persons (as you mentioned you already have 15 persons).
6. Even after hiring housekeeping and security personnel, if your number is <20 then you may still appoint them on the company's payroll, but apply for ESI code and later apply for PF code after reaching 20. I repeat, your company can voluntarily take PF coverage.
7. For coverage under ESI, you need not worry whether persons are drawing <15000 or >15000. It is the number of persons employed that matters for coverage and not the salary at the time of applying for the ESI code.
Hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Please note the following:
1. Sec 2(12) has been amended - As per this, factories employing 10 or more have to cover employees under ESI.
2. PF remains to be 20 persons (if companies want to cover voluntarily even if the number is less than 20, they may do so).
3. Ms. Ashwini - as you say, your company has 15 persons. Even if their salary is above Rs. 15,000/-, as you already have 15 persons working, you may apply for ESI to cover your company under ESI.
4. You may hire security and housekeeping personnel even if you do not have ESI and PF coverage. However, it is better if you engage these persons under a contract agency that has ESI and PF coverage if you are really concerned.
5. If you hire these persons under your company's payroll, then your numbers will reach the eligibility limit for both ESI and PF if you are taking more than 4 persons (as you mentioned you already have 15 persons).
6. Even after hiring housekeeping and security personnel, if your number is <20 then you may still appoint them on the company's payroll, but apply for ESI code and later apply for PF code after reaching 20. I repeat, your company can voluntarily take PF coverage.
7. For coverage under ESI, you need not worry whether persons are drawing <15000 or >15000. It is the number of persons employed that matters for coverage and not the salary at the time of applying for the ESI code.
Hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
It's compulsory as per the Act. If you don't want to comply from the company side, it's better to tell the outsourced agency to cover them under ESI & PF. However, you have to keep the records for inspection.
Regards,
Ramnath
From India, Bangalore
Acknowledge(0)Amend(0)
It's compulsory as per the Act. If you don't want to comply from the company side, it's better to tell the outsourced agency to cover them under ESI & PF. However, you have to keep the records for inspection.
Regards,
Ramnath
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Mr Subas Please quote which/whose msg you are referring Regards K.Ramachandra Bangalore
Acknowledge(0)Amend(0)
Acknowledge(0)Amend(0)
dear ashwin, u have to take first esi and epf code from the departments meant to say u have to get ur firm registered under these depts.
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
Dear Ramachandra, My concerned about them is they are getting only half of the amount from the agency.so we wanted them to take on our roll. Thanks.. Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
Please clarify what you mean by "getting only half of the amount from the agency." Do you mean the agency is paying only half of the salary from the amount that you are paying to the laborers?
There is no problem in taking the persons on your roll; it is your management's decision. Before that, you may enforce the agency to pay the amount in full that you pay him - hope you are giving him a margin or service charge over and above the amount payable to the laborers. He has to take only the margin and pay the statutory amounts and cannot pay half the salary to the persons.
If your questions are more specific, I can address them.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Please clarify what you mean by "getting only half of the amount from the agency." Do you mean the agency is paying only half of the salary from the amount that you are paying to the laborers?
There is no problem in taking the persons on your roll; it is your management's decision. Before that, you may enforce the agency to pay the amount in full that you pay him - hope you are giving him a margin or service charge over and above the amount payable to the laborers. He has to take only the margin and pay the statutory amounts and cannot pay half the salary to the persons.
If your questions are more specific, I can address them.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
Then the agency is the culprit. Please take the following actions:
1. Call the agency and advise them to arrange to pay the full salary as the company is already paying him in full.
2. He has to show the wage register (Form 22) to demonstrate the recording of the full salary, deductions of PF and ESI, and the concerned worker's signature. This needs to be a routine monthly check-up by you or the concerned authority.
3. Issue him a show-cause notice as to why he has not paid the amount even though the company has already done so.
4. If he does not pay ESI and PF even after your company has made the payment, your company will be liable to comply with ESI/PF. Therefore, advise him to remit all arrears of ESI and PF and inform him that if he does not comply, the amount will be recovered from his bills.
5. Request the ESI and PF numbers of all the workers engaged by him to verify whether they have been allotted PF and ESI numbers.
6. If he persists in this illegal behavior, terminate his contract and engage a reputable contractor.
Reply in case of doubts.
Regards,
K. Ramachandra
Acknowledge(0)Amend(0)
Then the agency is the culprit. Please take the following actions:
1. Call the agency and advise them to arrange to pay the full salary as the company is already paying him in full.
2. He has to show the wage register (Form 22) to demonstrate the recording of the full salary, deductions of PF and ESI, and the concerned worker's signature. This needs to be a routine monthly check-up by you or the concerned authority.
3. Issue him a show-cause notice as to why he has not paid the amount even though the company has already done so.
4. If he does not pay ESI and PF even after your company has made the payment, your company will be liable to comply with ESI/PF. Therefore, advise him to remit all arrears of ESI and PF and inform him that if he does not comply, the amount will be recovered from his bills.
5. Request the ESI and PF numbers of all the workers engaged by him to verify whether they have been allotted PF and ESI numbers.
6. If he persists in this illegal behavior, terminate his contract and engage a reputable contractor.
Reply in case of doubts.
Regards,
K. Ramachandra
Acknowledge(0)Amend(0)
Dear Ashwini,
You can make direct payments to security and housekeeping workers through bank payment by paying the manpower supplying agency. (I think Wipro in Hyderabad is paying for their security directly, and to that agency, they pay 10% profit as service charges and other applicable taxes.) In this case, you need not have complete administrative control over them, but obviously, you will have functional control over all the workers.
Furthermore, they can be paid on time, as the contractors are currently delaying their payments significantly.
Please review your agreement with the agency that is supplying the manpower for housekeeping and security services and start this process as early as possible. By doing so, your organization's security and housekeeping will be maintained in very good condition through this kind of action.
With warm regards,
S. Bhaskar
9099024667
From India, Kumbakonam
Acknowledge(0)Amend(0)
You can make direct payments to security and housekeeping workers through bank payment by paying the manpower supplying agency. (I think Wipro in Hyderabad is paying for their security directly, and to that agency, they pay 10% profit as service charges and other applicable taxes.) In this case, you need not have complete administrative control over them, but obviously, you will have functional control over all the workers.
Furthermore, they can be paid on time, as the contractors are currently delaying their payments significantly.
Please review your agreement with the agency that is supplying the manpower for housekeeping and security services and start this process as early as possible. By doing so, your organization's security and housekeeping will be maintained in very good condition through this kind of action.
With warm regards,
S. Bhaskar
9099024667
From India, Kumbakonam
Acknowledge(0)Amend(0)
Hi Bhasker,
Thank you so much for your reply. If we pay only the service charge, is it enough? What about ESI and PF? ESI is compulsory for them, right? Otherwise, should we pay them some service charge along with the ESI and PF amounts?
Thanks & Regards,
Ashwini.R
From India, Bangalore
Acknowledge(0)Amend(0)
Thank you so much for your reply. If we pay only the service charge, is it enough? What about ESI and PF? ESI is compulsory for them, right? Otherwise, should we pay them some service charge along with the ESI and PF amounts?
Thanks & Regards,
Ashwini.R
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
I just want to clarify Mr. Bhaskar's view:
1. Contractors are engaged and payments are made through the contractor to keep the principal employer (your company) safe from legal bindings. This ensures that the company will not have any liability concerning gratuity, regularization of employment at later stages, or the obligation to maintain records, etc.
2. You may pay directly, but if you have engaged them through a contractor, you must pay them based on their wage sheet only, not on your company's account or wage sheet.
3. Of course, as long as they remain on the contractor's payroll, you have to pay service charges. Service charges are typically paid at a rate of 10% or 12% on the overall bill amount (including ESI and PF margins). Some companies have a fixed amount per day or per month as service charges or per labor. Any such practices should be agreed upon mutually after negotiations with the contractor.
4. Also, when you are paying service charges to the contractor and the workers are on their payroll, why do you wish to take the trouble of paying their salaries yourself? All that is required is for you to enforce your authority on the contractor as the principal employer.
I hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
I just want to clarify Mr. Bhaskar's view:
1. Contractors are engaged and payments are made through the contractor to keep the principal employer (your company) safe from legal bindings. This ensures that the company will not have any liability concerning gratuity, regularization of employment at later stages, or the obligation to maintain records, etc.
2. You may pay directly, but if you have engaged them through a contractor, you must pay them based on their wage sheet only, not on your company's account or wage sheet.
3. Of course, as long as they remain on the contractor's payroll, you have to pay service charges. Service charges are typically paid at a rate of 10% or 12% on the overall bill amount (including ESI and PF margins). Some companies have a fixed amount per day or per month as service charges or per labor. Any such practices should be agreed upon mutually after negotiations with the contractor.
4. Also, when you are paying service charges to the contractor and the workers are on their payroll, why do you wish to take the trouble of paying their salaries yourself? All that is required is for you to enforce your authority on the contractor as the principal employer.
I hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
[QUOTE=ramachandrak62;1362502]
Dear Ashwini,
I just want to clarify Mr. Bhaskar's view:
1. Contractors are engaged, and payments are made through the contractor to keep the principal employer (your company) safe from legal bindings. This way, the company will not have any liability for gratuity, regularization of employment at later stages, obligation to maintain records, etc.
2. You may pay directly, but if you have taken them through a contractor, you have to pay on their wage sheet only and not on your company's account or wage sheet.
3. Of course, as long as they continue to be on the rolls of the contractor, you have to pay service charges. Service charges are normally paid at 10% or 12% on the overall bill amount (i.e., including ESI and PF margins), and some companies have a fixed amount per day or per month rate as service charges or per labor. You may have any such practices, but it should be after negotiating with the contractor and agreed upon mutually.
4. Also, when you are paying service charges to the contractor, and the workers are on his rolls, why do you wish to take the trouble of paying salary by yourself? All that is required is you have to enforce your authority on the contractor as the principal employer!
Hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
Hi Ramachandra,
Thank you so much for your clarification. Can we negotiate with the agency so that a certain percentage of service charge will be given to you, and the remaining amount has to be paid for security and housekeeping?
My question is, can we take them on our roll without paying PF and ESI and without PF and ESI Code?
Thanks & Regards,
Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
I just want to clarify Mr. Bhaskar's view:
1. Contractors are engaged, and payments are made through the contractor to keep the principal employer (your company) safe from legal bindings. This way, the company will not have any liability for gratuity, regularization of employment at later stages, obligation to maintain records, etc.
2. You may pay directly, but if you have taken them through a contractor, you have to pay on their wage sheet only and not on your company's account or wage sheet.
3. Of course, as long as they continue to be on the rolls of the contractor, you have to pay service charges. Service charges are normally paid at 10% or 12% on the overall bill amount (i.e., including ESI and PF margins), and some companies have a fixed amount per day or per month rate as service charges or per labor. You may have any such practices, but it should be after negotiating with the contractor and agreed upon mutually.
4. Also, when you are paying service charges to the contractor, and the workers are on his rolls, why do you wish to take the trouble of paying salary by yourself? All that is required is you have to enforce your authority on the contractor as the principal employer!
Hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
Hi Ramachandra,
Thank you so much for your clarification. Can we negotiate with the agency so that a certain percentage of service charge will be given to you, and the remaining amount has to be paid for security and housekeeping?
My question is, can we take them on our roll without paying PF and ESI and without PF and ESI Code?
Thanks & Regards,
Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
Yes, you can negotiate based on their quotation (generally, the market rate is 10 to 12% of the overall bill amount) or, as I mentioned, you can fix a specific amount per labor/per day or per month instead of a percentage. You have every right to negotiate with the contractor until you both mutually agree.
If you feel you are paying an extra service charge to the contractor, you can definitely pay that amount to the security and housekeeping personnel as a different component, such as washing allowance, conveyance, special allowance, etc.
You can certainly take them on your payroll. However, as I mentioned, if the number of persons engaged by you is 10 for ESI and 20 for PF, you have to apply for PF and ESI codes and pay the contributions. You cannot avoid PF and ESI. Only if the number of employees is less than the mentioned numbers, you need not pay ESI and PF. Additionally, once you take them on your rolls, the contractor ceases to exist, and the individuals will become direct employees of your company.
You may decide accordingly based on the above.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Yes, you can negotiate based on their quotation (generally, the market rate is 10 to 12% of the overall bill amount) or, as I mentioned, you can fix a specific amount per labor/per day or per month instead of a percentage. You have every right to negotiate with the contractor until you both mutually agree.
If you feel you are paying an extra service charge to the contractor, you can definitely pay that amount to the security and housekeeping personnel as a different component, such as washing allowance, conveyance, special allowance, etc.
You can certainly take them on your payroll. However, as I mentioned, if the number of persons engaged by you is 10 for ESI and 20 for PF, you have to apply for PF and ESI codes and pay the contributions. You cannot avoid PF and ESI. Only if the number of employees is less than the mentioned numbers, you need not pay ESI and PF. Additionally, once you take them on your rolls, the contractor ceases to exist, and the individuals will become direct employees of your company.
You may decide accordingly based on the above.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
Obviously, we have to remit their PF & ESI directly, similar to other direct workers under us. You need to include this in their bill, deduct the same, and we can remit it with the concerned commissionerate. In addition, if they are paying service tax, that too, along with the fixed profit, can be paid to them. They have to submit the service tax challans every quarter after remittance. The TDS part we have to remit, and as a result, we have to provide the TDS Certificate to the service provider.
With warm regards,
S. Bhaskar
9099024667
From India, Kumbakonam
Acknowledge(0)Amend(0)
Obviously, we have to remit their PF & ESI directly, similar to other direct workers under us. You need to include this in their bill, deduct the same, and we can remit it with the concerned commissionerate. In addition, if they are paying service tax, that too, along with the fixed profit, can be paid to them. They have to submit the service tax challans every quarter after remittance. The TDS part we have to remit, and as a result, we have to provide the TDS Certificate to the service provider.
With warm regards,
S. Bhaskar
9099024667
From India, Kumbakonam
Acknowledge(0)Amend(0)
Hi Ramachandra.. Thank you very much for clarification..then we cant take them on our roll..we are above 10...only i can talk to Contractor. Regards, Ashwini.
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
I strongly recommend leaving those people under the contractor's role only and ensuring that the due wages are paid to the concerned workers. Additionally, make sure that ESI and PF contributions are also paid by the contractor. By doing so, you can avoid the burden of managing the entire records, their salaries, etc.
As a principal employer, you have the authority to supervise and enforce compliance on the contractor for any lapses.
Please proceed with the above proposal, and I wish you all the best.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
I strongly recommend leaving those people under the contractor's role only and ensuring that the due wages are paid to the concerned workers. Additionally, make sure that ESI and PF contributions are also paid by the contractor. By doing so, you can avoid the burden of managing the entire records, their salaries, etc.
As a principal employer, you have the authority to supervise and enforce compliance on the contractor for any lapses.
Please proceed with the above proposal, and I wish you all the best.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Hi Ramachandra,
This question has already been asked by one of our HR CITE members, and we have a similar situation in our company. We have changed some terms and conditions in our appointment letter (very important). We are issuing the same appointment letter to our new joiners. For old employees, do we need to issue a new appointment letter or a circular? It should be legally binding. Please clarify this for me.
Thanks & Regards,
Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
This question has already been asked by one of our HR CITE members, and we have a similar situation in our company. We have changed some terms and conditions in our appointment letter (very important). We are issuing the same appointment letter to our new joiners. For old employees, do we need to issue a new appointment letter or a circular? It should be legally binding. Please clarify this for me.
Thanks & Regards,
Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
If the revised terms and conditions are applicable to the old employees as well, then you may communicate in two ways:
01. If you want to issue the letters individually, make revised service rules/terms & conditions and issue them to the old employees. Include a covering letter stating, "This is to inform you that the management has revised the existing service rules. The revised service rules/terms and conditions are attached herewith and will be in force with immediate effect. Please take note of the same and return an acknowledged copy for confirmation of receipt."
02. Alternatively, a general circular can be created to communicate the complete revised service rules/terms and conditions to all old members. Request their signatures to acknowledge the changes.
Both steps are acceptable.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
If the revised terms and conditions are applicable to the old employees as well, then you may communicate in two ways:
01. If you want to issue the letters individually, make revised service rules/terms & conditions and issue them to the old employees. Include a covering letter stating, "This is to inform you that the management has revised the existing service rules. The revised service rules/terms and conditions are attached herewith and will be in force with immediate effect. Please take note of the same and return an acknowledged copy for confirmation of receipt."
02. Alternatively, a general circular can be created to communicate the complete revised service rules/terms and conditions to all old members. Request their signatures to acknowledge the changes.
Both steps are acceptable.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
I wish you and your family a very happy and prosperous New Year. It's nice to hear that you were able to solve some issues based on the suggestions given. Please do not hesitate to contact me for any further issues; you may make note of my email address: ramachandrak62@gmail.com.
Take care.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
I wish you and your family a very happy and prosperous New Year. It's nice to hear that you were able to solve some issues based on the suggestions given. Please do not hesitate to contact me for any further issues; you may make note of my email address: ramachandrak62@gmail.com.
Take care.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Hi Ramachandra,
Very good evening. I hope everything is going well on your end. As you are aware, these months of February, March, and April are fully occupied with tax, payroll audits, and year-end closing accounts.
As I am new to this, I am receiving many queries from our staff regarding taxes. Could you please provide a brief explanation? How is this payroll audit done? What are the procedures for taxation? What are the common queries that may arise from the staff (FAQs)?
Please share some insights for all those who are new to this. Thank you so much.
Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
Very good evening. I hope everything is going well on your end. As you are aware, these months of February, March, and April are fully occupied with tax, payroll audits, and year-end closing accounts.
As I am new to this, I am receiving many queries from our staff regarding taxes. Could you please provide a brief explanation? How is this payroll audit done? What are the procedures for taxation? What are the common queries that may arise from the staff (FAQs)?
Please share some insights for all those who are new to this. Thank you so much.
Ashwini
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ahwini and all,
Good evening/good day. Yes, everything is going well.
I will provide some details from a general perspective:
1. Payroll audit is an internal exercise generally done by the Finance/Accounts department in coordination with the HR & IR department.
2. Basically, this is done to reset the internal system of attendance, payment of salaries, components of salaries, restructuring of salaries, etc.
3. The method/process of such an audit depends on each company, and this is not a mandatory exercise.
Regarding Tax,
The Finance Department will normally initiate this process. The following would generally be done:
1. The finance department will create a format for collecting information from the company employees, which will be called a declaration form or income-tax declaration form.
2. Such a form will include employees' names and basic details, as well as investments, savings, details of LIC policies, amounts paid, donations, mutual funds, etc., which have to be considered for tax calculations.
3. A deadline is given to the employees to provide these details.
4. Once these are submitted, the Finance department, based on the salary details available to them, will compute the tax liability. Copies of connected investments by employees have to be collected by Finance.
5. It is a general practice that the Finance Department, in coordination with the HR department, will distribute this calculation to all its employees to check the tax liability and consider making any further investments/savings before March-end or even earlier to reduce the tax liability.
6. Once this is finalized, the finance department will again compute the tax liability, deduct the tax payable, if any, and remit it to the concerned authorities.
7. After this, Form 16 is generated and given to the employees.
8. Based on this, the employees have to submit income-tax returns to the IT department along with Form 16 - mostly by the end of July (likely to be extended).
Staff will generally raise the following questions:
1. Whether I have to pay tax - to refer to the step-by-step tax calculation procedure (Finance can help) and then to arrive at the answer.
2. Whether I can invest some more - the same answer as above holds good.
3. How to fill up IT form - the person who has read and understood can help.
4. Where do I get IT return form? - You may arrange to collect from the department and distribute, or personally they can collect, or they can download from the department website.
5. Individually, employees may ask a variety of questions - to deal with them appropriately as they come.
Hope this helps you understand some details.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Good evening/good day. Yes, everything is going well.
I will provide some details from a general perspective:
1. Payroll audit is an internal exercise generally done by the Finance/Accounts department in coordination with the HR & IR department.
2. Basically, this is done to reset the internal system of attendance, payment of salaries, components of salaries, restructuring of salaries, etc.
3. The method/process of such an audit depends on each company, and this is not a mandatory exercise.
Regarding Tax,
The Finance Department will normally initiate this process. The following would generally be done:
1. The finance department will create a format for collecting information from the company employees, which will be called a declaration form or income-tax declaration form.
2. Such a form will include employees' names and basic details, as well as investments, savings, details of LIC policies, amounts paid, donations, mutual funds, etc., which have to be considered for tax calculations.
3. A deadline is given to the employees to provide these details.
4. Once these are submitted, the Finance department, based on the salary details available to them, will compute the tax liability. Copies of connected investments by employees have to be collected by Finance.
5. It is a general practice that the Finance Department, in coordination with the HR department, will distribute this calculation to all its employees to check the tax liability and consider making any further investments/savings before March-end or even earlier to reduce the tax liability.
6. Once this is finalized, the finance department will again compute the tax liability, deduct the tax payable, if any, and remit it to the concerned authorities.
7. After this, Form 16 is generated and given to the employees.
8. Based on this, the employees have to submit income-tax returns to the IT department along with Form 16 - mostly by the end of July (likely to be extended).
Staff will generally raise the following questions:
1. Whether I have to pay tax - to refer to the step-by-step tax calculation procedure (Finance can help) and then to arrive at the answer.
2. Whether I can invest some more - the same answer as above holds good.
3. How to fill up IT form - the person who has read and understood can help.
4. Where do I get IT return form? - You may arrange to collect from the department and distribute, or personally they can collect, or they can download from the department website.
5. Individually, employees may ask a variety of questions - to deal with them appropriately as they come.
Hope this helps you understand some details.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Hi Ramachandra,
Very Good Evening...
Thank you soo much for you inputs...
I got the below Tax slab in HR Site.
Can please give input on Tax Calculation...
Please clarify above calculation
1.is the tax wiil bw calculated on CTC 3 Lakh or on 1.4 lakh is taxble amount ?
2. Bonus ans increment:is there is the policy if a employee get bonus he is not eleigible for Increment and if a employee get increment he is not elegible for bonus.
when as asked my management bonus and increment i got this reply.But our staff expecting both.
Thanks and regards
Ashwini
Subject - Re: Income tax 2010-2011
Income Tax Rates/Slabs for A.Y. (2010-11)
Slab (Rs.) Tax (Rs.)
less than 1,60,000 Nil
1,60,000 to 3,00,000 (TI – 1,60,000) * 10%
3,00,000 to 5,00,000 14,000 + (TI – 3,00,000) * 20%
Greater than 5,00,000 54,000 + (TI – 5,00,000) * 30%
Women aged 65 years or less
Slab (Rs.) Tax (Rs.)
less than 1,90,000 Nil
1,90,000 to 3,00,000 (TI – 1,90,000) * 10%
3,00,000 to 5,00,000 11,000 + (TI – 3,00,000) * 20%
Greater than 5,00,000 51,000 + (TI – 5,00,000) * 30%
Senior Citizens (Individuals aged above 65 years)
Slab (Rs.) Tax (Rs.)
less than 2,40,000 Nil
2,40,000 to 3,00,000 (TI – 2,40,000) * 10%
3,00,000 to 5,00,000 6,000 + (TI – 3,00,000) * 20%
Greater than 5,00,000 46,000 + (TI – 5,00,000) * 30%
From India, Bangalore
Acknowledge(0)Amend(0)
Very Good Evening...
Thank you soo much for you inputs...
I got the below Tax slab in HR Site.
Can please give input on Tax Calculation...
- Is the tax wiil be calculated on Gross Salary or after exemption on remaining amount the persentage will be calaculate.Example CTC is 3,00000.Exemption1,60,000.300000 160000=140000.
Please clarify above calculation
1.is the tax wiil bw calculated on CTC 3 Lakh or on 1.4 lakh is taxble amount ?
2. Bonus ans increment:is there is the policy if a employee get bonus he is not eleigible for Increment and if a employee get increment he is not elegible for bonus.
when as asked my management bonus and increment i got this reply.But our staff expecting both.
Thanks and regards
Ashwini
Subject - Re: Income tax 2010-2011
Income Tax Rates/Slabs for A.Y. (2010-11)
Slab (Rs.) Tax (Rs.)
less than 1,60,000 Nil
1,60,000 to 3,00,000 (TI – 1,60,000) * 10%
3,00,000 to 5,00,000 14,000 + (TI – 3,00,000) * 20%
Greater than 5,00,000 54,000 + (TI – 5,00,000) * 30%
Women aged 65 years or less
Slab (Rs.) Tax (Rs.)
less than 1,90,000 Nil
1,90,000 to 3,00,000 (TI – 1,90,000) * 10%
3,00,000 to 5,00,000 11,000 + (TI – 3,00,000) * 20%
Greater than 5,00,000 51,000 + (TI – 5,00,000) * 30%
Senior Citizens (Individuals aged above 65 years)
Slab (Rs.) Tax (Rs.)
less than 2,40,000 Nil
2,40,000 to 3,00,000 (TI – 2,40,000) * 10%
3,00,000 to 5,00,000 6,000 + (TI – 3,00,000) * 20%
Greater than 5,00,000 46,000 + (TI – 5,00,000) * 30%
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ahwini,
Following are the answers:
Q1. Tax is calculated after deducting the standard deduction amount (1.6 lacs in case of male, 1.9 lacs in case of female employees).
a. HRA exemption: either 40% of gross salary, or rent paid - 40% of basic or Actual HRA received, whichever is lower.
b. Savings of all types (including PF, LIC, children's tuition fee, PPF, etc., up to Rs.1,00,000) exempted.
c. The balance is taken as taxable income.
So, if the total income is Rs.3.0 lacs, please calculate tax liability as above and arrive at the taxable income after deducting the standard deduction amount, savings, HRA, etc.
Q2. Bonus cannot be linked to increment. Bonus is statutory and is payable as long as the employee's salary (Basic+DA) falls within the limit of Bonus Act, which is Rs.10,000/- now. There is no policy that those who get a bonus cannot be paid an increment. Increment is the company's discretion and may or may not be paid depending on your company's policy, performance, etc.
The company can give both bonus and increment as they are not inter-linked. The government will not question if you do not pay an increment; but the authorities will question if you do not pay a bonus.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Following are the answers:
Q1. Tax is calculated after deducting the standard deduction amount (1.6 lacs in case of male, 1.9 lacs in case of female employees).
a. HRA exemption: either 40% of gross salary, or rent paid - 40% of basic or Actual HRA received, whichever is lower.
b. Savings of all types (including PF, LIC, children's tuition fee, PPF, etc., up to Rs.1,00,000) exempted.
c. The balance is taken as taxable income.
So, if the total income is Rs.3.0 lacs, please calculate tax liability as above and arrive at the taxable income after deducting the standard deduction amount, savings, HRA, etc.
Q2. Bonus cannot be linked to increment. Bonus is statutory and is payable as long as the employee's salary (Basic+DA) falls within the limit of Bonus Act, which is Rs.10,000/- now. There is no policy that those who get a bonus cannot be paid an increment. Increment is the company's discretion and may or may not be paid depending on your company's policy, performance, etc.
The company can give both bonus and increment as they are not inter-linked. The government will not question if you do not pay an increment; but the authorities will question if you do not pay a bonus.
Regards,
K. Ramachandra
Bangalore
Acknowledge(0)Amend(0)
Hey folks,
The above statements are okay with regard to ESI & PF, but if you need to take security guards on your payroll, you should be registered with the Security Board of that area. Security guards don't come under the Labour Act. They come under a different act like CLRA. So, please do take care of this.
From India, Delhi
Acknowledge(0)Amend(0)
The above statements are okay with regard to ESI & PF, but if you need to take security guards on your payroll, you should be registered with the Security Board of that area. Security guards don't come under the Labour Act. They come under a different act like CLRA. So, please do take care of this.
From India, Delhi
Acknowledge(0)Amend(0)
Yes Mr. Samuel The agency must get registered with Home Department and not with Labour Department.
From India, Kumbakonam
Acknowledge(0)Amend(0)
From India, Kumbakonam
Acknowledge(0)Amend(0)
Hi Samuel and Basker,
Thank you for your input. This is a new piece of information for me. I have never heard of this before. I believed that their security would come under the Labour Act. Thank you so much.
Then, what about housekeeping? Will they come under the Labour Act?
Regards, Ashwini
Regards, Ashwini.
From India, Bangalore
Acknowledge(0)Amend(0)
Thank you for your input. This is a new piece of information for me. I have never heard of this before. I believed that their security would come under the Labour Act. Thank you so much.
Then, what about housekeeping? Will they come under the Labour Act?
Regards, Ashwini
Regards, Ashwini.
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ashwini,
To maintain the security agency, you must obtain permission from the Home Department. After obtaining the permission, you should also acquire a labor license for the security and housekeeping teams. I can provide you with the complete details within 2 days after confirming with our security agency.
From India, Kumbakonam
Acknowledge(0)Amend(0)
To maintain the security agency, you must obtain permission from the Home Department. After obtaining the permission, you should also acquire a labor license for the security and housekeeping teams. I can provide you with the complete details within 2 days after confirming with our security agency.
From India, Kumbakonam
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Company Profile.ppt
MW-Jan-June'18- Security.pdf