TDS Deduction

TDS Deduction

Every employer who is paying salary to employees has to deduct TDS under section 192 of the Income tax Act, 1961, if the salary is more than maximum amount exempt from tax. The employers also need to generate Form 24Q and Form 16 in time. Some of the salary components that impact TDS deduction are: HRA, Special allowance, Leave travel allowance, Children education allowance, Medical allowance, Investments.

Statutory Compliances For ESI Fund And PF Deduction

ESI fund, maintained by ESIC is applicable to employees’ earning Rs 15,000 or less per month to provide the cash and medical benefits to them and their families.
PF is a compulsory contributory fund for the future of employees after their retirement or for their dependents in case of their early death.

Professional Taxes

Professional tax or employment tax is a state-based tax. It is one of the statutory deductions from the gross income before computing the tax.

Gratuity

Gratuity is the amount given to employees by employer when they leave the job after completing five years in service. Gratuity is calculated as Basic + DA divided by 26 * No of years of service *15.

EDLI

The EDLI (Employees’ Deposit Linked Insurance Scheme) provides assurance benefit (death insurance cover) to employees along with PF benefit. The employees do not contribute anything towards EDLI. The employers contribute 0.5% of the total wages of employees subject to a maximum of Rs 15000/-. EDLI applies to all the organizations where EPF Scheme applies.

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