Consolidated pay, hired in Chennai, with the head office in Hyderabad. What would be the process of deductions if a company wants to pay him ₹35,000 per month as consolidated? He is joining from 8th August 2021 as Senior Manager Contracts & Business Development. Location: Bangalore, India
From India, Bangalore
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5From India, Bangalore
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To determine the deductions for an employee receiving a consolidated pay of ₹35,000 per month in Bangalore, India, several factors need consideration:
- Income Tax:
- The company must deduct TDS (Tax Deducted at Source) as per the Income Tax slab rates applicable to the employee's income. This deduction depends on the individual's total income, including other sources of earnings if any.
- Professional Tax:
- Professional Tax is applicable in some states in India, including Karnataka (where Bangalore is located). The company needs to deduct professional tax according to the state-specific rules.
- Provident Fund (PF):
- If the employee's basic salary is above the PF threshold (currently ₹15,000), PF deductions need to be made as per the statutory rate unless the employee is already a member of an EPF scheme.
- ESI (Employee State Insurance):
- If the employee's gross salary is below ₹21,000, ESI deductions are mandatory. However, since the consolidated pay doesn't typically include benefits like ESI, this may not apply in this scenario.
- Other Deductions:
- Deductions for any other benefits or facilities provided by the company, such as health insurance, professional development, or any other voluntary deductions agreed upon with the employee.
- Miscellaneous Deductions:
- Any other deductions mandated by law or agreed upon in the employment contract, such as loan repayments or advances taken by the employee.
- Net Pay:
- After deducting the applicable amounts for taxes, PF, and any other deductions, the employee should receive the net pay of ₹35,000.
It's crucial for the company to ensure compliance with relevant labor laws and tax regulations when processing deductions for the employee's consolidated pay. Consulting with a tax professional or HR expert can help in accurately calculating and deducting the necessary amounts from the employee's salary.
From India, Gurugram
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- Income Tax:
- The company must deduct TDS (Tax Deducted at Source) as per the Income Tax slab rates applicable to the employee's income. This deduction depends on the individual's total income, including other sources of earnings if any.
- Professional Tax:
- Professional Tax is applicable in some states in India, including Karnataka (where Bangalore is located). The company needs to deduct professional tax according to the state-specific rules.
- Provident Fund (PF):
- If the employee's basic salary is above the PF threshold (currently ₹15,000), PF deductions need to be made as per the statutory rate unless the employee is already a member of an EPF scheme.
- ESI (Employee State Insurance):
- If the employee's gross salary is below ₹21,000, ESI deductions are mandatory. However, since the consolidated pay doesn't typically include benefits like ESI, this may not apply in this scenario.
- Other Deductions:
- Deductions for any other benefits or facilities provided by the company, such as health insurance, professional development, or any other voluntary deductions agreed upon with the employee.
- Miscellaneous Deductions:
- Any other deductions mandated by law or agreed upon in the employment contract, such as loan repayments or advances taken by the employee.
- Net Pay:
- After deducting the applicable amounts for taxes, PF, and any other deductions, the employee should receive the net pay of ₹35,000.
It's crucial for the company to ensure compliance with relevant labor laws and tax regulations when processing deductions for the employee's consolidated pay. Consulting with a tax professional or HR expert can help in accurately calculating and deducting the necessary amounts from the employee's salary.
From India, Gurugram
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