Fastcollab - 4 STATUTORY DEDUCTIONS TO CONSIDER WHILE RUNNING PAYROLL

FASTCOLLAB 4 STATUTORY DEDUCTIONS TO CONSIDER WHILE RUNNING PAYROLL

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It is a general guideline from Government of India that if a company crosses the employee strength of 20 numbers, it is time the employers should bring some statutory deductions in picture, like – Employee Provident Fund (EPF), Professional Tax (PT), Employees’ State Insurance (ESI). However Income Tax (IT) deductions (also known as Tax Deducted at Source (TDS) is applicable even with a single employee.

1. Employees’ Provident Fund (EPF) • EPF came into existence in 11th November 1952. EPF has traditionally been the only device for most Indians, particularly for the salaried class, so that they can save their retirement corpus. The government has now offered to pay interest on faulty accounts, almost 60 % of the total number.

2. Professional Tax (PT) Professional Tax is the tax duty on professions & trades in India. It is the state-level tax & has to pay imperatively by every member employed in private organisations.

3. Employees’ State Insurance (ESI) • ESI is contributed from both the sides Employer as well as Employee. It is calculated on the basis of Total salary per month, and the maximum ceiling is Rs.15000 per Month.

4. Income Tax (IT) deduction or TDS • Under the Section 192, the employer is needed to deduct TDS while making the payment month-on-month salary for any financial year to the employees. The tax form or forms applied to file Income Tax with the Internal Revenue Service (IRS).

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