We are remitting contribution to epf/esic in gross wages now, and we are not segregated as Basic/DA/HRA and allowance. We want to give sum amount @ the level of 5% of wages as Special allowance. We have to contribute EPF and ESIC for this or not?
From India, Chennai
From India, Chennai
Dear Friend,
I wish to urge here that EPF and ESIC are not a part of remittance its a deduction.
The second thing is as far as concern to Special allowance you can refer to your state gazette for the SA, because it is vary according to segment/industry.
I don't know which industry you are working in.
Hence do accordingly.
Rgds
From India, Mumbai
19I wish to urge here that EPF and ESIC are not a part of remittance its a deduction.
The second thing is as far as concern to Special allowance you can refer to your state gazette for the SA, because it is vary according to segment/industry.
I don't know which industry you are working in.
Hence do accordingly.
Rgds
From India, Mumbai
Firstly you should knows the basic concept of Special Allowance
## Special Allowance
Special allowance differs from company to company. In some companies, it constitutes any allowance or benefit granted to employees to meet specific expenses towards efficient performance of duties in an office or employment of profit (as laid down in the IT Rules, 1962). If it is specifically granted to employees, it is exempt to the extent of actual expenditure incurred. However, in pay slips given to employees by some companies, any number by the name of 'special allowance' is usually the leftover component of the salary, after allocations are divided into basic, LTA, transport allowance, HRA and so forth. Special allowance is, therefore, money which does not fit into any other head in a salary slip or the residual factor. After all the different components of a salary slip including benefits are allocated, the remaining sum of money which makes up the annual CTC, forms part of special allowance.
-Categories of Special Allowance:
Special allowances are paid on a monthly basis and are taxable. Special allowance can be divided into two categories, namely,
1.Personal allowances and
2.Official allowances.
Various types of personal allowances include the following:
•Children Education Allowance
The maximum exemption of Rs.100 per month per child for two children, while excess is taxable
•Hostel Allowance
The maximum exemption is Rs.300 per month per child for two children. Excess is taxable
•Transport Allowance
The maximum exemption is Rs.1600 per month. Excess is taxable. The maximum is Rs.3200 per month in case of handicapped employees. Excess is taxable.
•Underground Allowance
Granted to employees working in underground mines. The maximum exemption is Rs.800 per month, while excess is taxable.
•Tribal Area Allowance
Special allowance for residents living in hilly areas, scheduled areas and agency areas. Available in Madhya Pradesh, Uttar Pradesh, Karnataka, Odessa, Assam, Tamil Nadu and Tripura. The maximum exemption is Rs.200 per month. Excess is taxable.
•Outstation Allowance
Allowance paid by railways, roadways and airways to their employees in lieu of daily allowance
Exempt to the least of 70% of allowance, Rs.10, 000 per month
Taxable = received - exempt
•Island Duty Allowance
Granted to members of armed forces for performance of duties in Andaman and Nicobar Islands and Lakshadweep Group of Islands. The maximum exemption is Rs.3250 p.m.
Various types of official allowances include the following:
•Travelling Allowance
Includes cost of travel during tour or on transfer of duty. This allowance is exempt from Income Tax while saving is taxable.
•Daily Allowance
Includes daily charges incurred by an employee while on a tour. This allowance is exempt from Income Tax while saving is taxable.
•Conveyance Allowance
Includes expenditure incurred on conveyance during performance of duties of an employment of profit or office. This allowance is exempt from Income Tax while saving is taxable.
•Uniform Allowance
Includes expenditure on purchase and maintenance of uniform worn during performance of duties of an office or employment of profit. This allowance is exempt from Income Tax while saving is taxable.
•Academic/ Research Allowance
Granted for encouraging academic research and training pursuits in research institutions. This allowance is exempt from Income Tax while saving is taxable.
•Helper Allowance
Provided to cover expenditure incurred on a helper hired for performance of duties of an office or employment of profit. This allowance is exempt from Income Tax while saving is taxable.
Please make a note that Contribution of Epf on monthly Basic Salary and Dearness Allowance or Various Dearness Allowance (whichever is applicable ) and Contribution of ESIC on monthly Gross salary.
As per ESIC Act, contribution is payable on Special Allowance beacause special allowance is comes under Total Remuneration
Based on above you can decide that which types of special allowance is applicable in your Organization then after that you can find your question's answer.
Regards,
Amit
From India, Delhi
## Special Allowance
Special allowance differs from company to company. In some companies, it constitutes any allowance or benefit granted to employees to meet specific expenses towards efficient performance of duties in an office or employment of profit (as laid down in the IT Rules, 1962). If it is specifically granted to employees, it is exempt to the extent of actual expenditure incurred. However, in pay slips given to employees by some companies, any number by the name of 'special allowance' is usually the leftover component of the salary, after allocations are divided into basic, LTA, transport allowance, HRA and so forth. Special allowance is, therefore, money which does not fit into any other head in a salary slip or the residual factor. After all the different components of a salary slip including benefits are allocated, the remaining sum of money which makes up the annual CTC, forms part of special allowance.
-Categories of Special Allowance:
Special allowances are paid on a monthly basis and are taxable. Special allowance can be divided into two categories, namely,
1.Personal allowances and
2.Official allowances.
Various types of personal allowances include the following:
•Children Education Allowance
The maximum exemption of Rs.100 per month per child for two children, while excess is taxable
•Hostel Allowance
The maximum exemption is Rs.300 per month per child for two children. Excess is taxable
•Transport Allowance
The maximum exemption is Rs.1600 per month. Excess is taxable. The maximum is Rs.3200 per month in case of handicapped employees. Excess is taxable.
•Underground Allowance
Granted to employees working in underground mines. The maximum exemption is Rs.800 per month, while excess is taxable.
•Tribal Area Allowance
Special allowance for residents living in hilly areas, scheduled areas and agency areas. Available in Madhya Pradesh, Uttar Pradesh, Karnataka, Odessa, Assam, Tamil Nadu and Tripura. The maximum exemption is Rs.200 per month. Excess is taxable.
•Outstation Allowance
Allowance paid by railways, roadways and airways to their employees in lieu of daily allowance
Exempt to the least of 70% of allowance, Rs.10, 000 per month
Taxable = received - exempt
•Island Duty Allowance
Granted to members of armed forces for performance of duties in Andaman and Nicobar Islands and Lakshadweep Group of Islands. The maximum exemption is Rs.3250 p.m.
Various types of official allowances include the following:
•Travelling Allowance
Includes cost of travel during tour or on transfer of duty. This allowance is exempt from Income Tax while saving is taxable.
•Daily Allowance
Includes daily charges incurred by an employee while on a tour. This allowance is exempt from Income Tax while saving is taxable.
•Conveyance Allowance
Includes expenditure incurred on conveyance during performance of duties of an employment of profit or office. This allowance is exempt from Income Tax while saving is taxable.
•Uniform Allowance
Includes expenditure on purchase and maintenance of uniform worn during performance of duties of an office or employment of profit. This allowance is exempt from Income Tax while saving is taxable.
•Academic/ Research Allowance
Granted for encouraging academic research and training pursuits in research institutions. This allowance is exempt from Income Tax while saving is taxable.
•Helper Allowance
Provided to cover expenditure incurred on a helper hired for performance of duties of an office or employment of profit. This allowance is exempt from Income Tax while saving is taxable.
Please make a note that Contribution of Epf on monthly Basic Salary and Dearness Allowance or Various Dearness Allowance (whichever is applicable ) and Contribution of ESIC on monthly Gross salary.
As per ESIC Act, contribution is payable on Special Allowance beacause special allowance is comes under Total Remuneration
Based on above you can decide that which types of special allowance is applicable in your Organization then after that you can find your question's answer.
Regards,
Amit
From India, Delhi
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Maharashtra Special allowance Notification July 14 to Dec 14.pdf