As principle employer that is your responsibility to pay pf &esi to the contract labour either by the contractor or principle employer
From India, Hyderabad
From India, Hyderabad
Dear Ratika,
The status iro the contractual employee for PF-ESI is depends upon the nature of job, appointment letter, salary structure, ethics of ur co. If u really want to cover the employee under PF-ESI u can do so as per complicances.
But if the specific employee is on higher remuneration/salary, u can exclude him from PF and ESI. In that case u have to come into an agreement with him that you are hiring him for some professional services. The agreement should have a valid period, amount (monthly/annual), payment terms, specific nature of job, termination clause and other legal clauses. In that case the person will be treated a "Contractor" in your company. For his services he will raise an invoice (monthly) for the agreed amount. U have to process the bill to a/cs dept. like a vendor/contractor bill and accordingly payment will be released.
The major difficulty with u and him will be "you have to deduct TDS from him payment as per govt norms".
After closing of F.Y. he can claim Refund of the TDS thru ITR. If his remuneration will be under tax free slab, he will get full refund. But if his remuneration will be beyond the tax free limit, the Refund can be claimed after necessary TAX deductions from the whole TDS amount.
Hope now that matter is also cleared to you.
From India, Delhi
94The status iro the contractual employee for PF-ESI is depends upon the nature of job, appointment letter, salary structure, ethics of ur co. If u really want to cover the employee under PF-ESI u can do so as per complicances.
But if the specific employee is on higher remuneration/salary, u can exclude him from PF and ESI. In that case u have to come into an agreement with him that you are hiring him for some professional services. The agreement should have a valid period, amount (monthly/annual), payment terms, specific nature of job, termination clause and other legal clauses. In that case the person will be treated a "Contractor" in your company. For his services he will raise an invoice (monthly) for the agreed amount. U have to process the bill to a/cs dept. like a vendor/contractor bill and accordingly payment will be released.
The major difficulty with u and him will be "you have to deduct TDS from him payment as per govt norms".
After closing of F.Y. he can claim Refund of the TDS thru ITR. If his remuneration will be under tax free slab, he will get full refund. But if his remuneration will be beyond the tax free limit, the Refund can be claimed after necessary TAX deductions from the whole TDS amount.
Hope now that matter is also cleared to you.
From India, Delhi
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls