I am really sorry for making all my readers waiting this long. It has been busy days.
Now getting on the track, we were discussing on the pay structure part. We have seen in the last blog the basic pay structure and related terms. Today we shall look into some of the statutory allowances and deductions designed by the Govt. India.
Professional Tax: In short it is called as P.T. This is a fixed amount deducted from Gross salary based on slab defined by the government. However this is not imposed in all the states of India.Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Total tax deducted under this for an employee per year must not be more than 2,400/-. More info http://tax-india.com/professional-tax/professional-tax-in-india/ and http://pt.kar.nic.in/(S(bf35bjbpyebxv545hsrvweuf))/Main.aspx
In further weeks we shall look into Income Tax (TDS), ESI, DA, Minimum Wage act.So that we shall have thorough knowledge of statutory requirements in India. It is obvious that ERP softwares must be adhered to these requirements. So the basic knowledge about these is very much essential.
Now getting on the track, we were discussing on the pay structure part. We have seen in the last blog the basic pay structure and related terms. Today we shall look into some of the statutory allowances and deductions designed by the Govt. India.
Provident Fund: In short its called as P.F. It is a fixed percentage of amount which is deducted from Gross salary and kept in PF account maintained by Central Government. Currently the fixed percentage is 12% from Employee Gross Salary. Here in addition to this 12% deducted from Employee Gross salary, an equal amount is also has to be paid by the Employer (Company) to the PF account of the employee. So totally it will be 24% of the Gross Salary which is deposited in PF account of the employee. Each company has PF registration number and also each Employee who is eligible for PF will have PF Account number. Major advantages of PF deduction is it has got 8.5% interest rate calculated monthly. The PF account holder can get loans from their PF accounts after certain period which has to paid in lesser interest rate compare to banks. This will also paid back as pension when a person retires. For more info visit http://en.wikipedia.org/wiki/Employees_Provident_Fund_Organisation_of_India and http://www.indiapost.gov.in/POSBActs/PPFRules1968.pdf It is mandatory for organization having more than certain number of employees.
Professional Tax: In short it is called as P.T. This is a fixed amount deducted from Gross salary based on slab defined by the government. However this is not imposed in all the states of India.Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Total tax deducted under this for an employee per year must not be more than 2,400/-. More info http://tax-india.com/professional-tax/professional-tax-in-india/ and http://pt.kar.nic.in/(S(bf35bjbpyebxv545hsrvweuf))/Main.aspx
In further weeks we shall look into Income Tax (TDS), ESI, DA, Minimum Wage act.So that we shall have thorough knowledge of statutory requirements in India. It is obvious that ERP softwares must be adhered to these requirements. So the basic knowledge about these is very much essential.
