Arrears 1. What is Arrear & Increment? Pending salary amount paid in later days is arrears. Increase in salary is increment. Attendance 1. Why attendance is required? Attendance is the basic criteria on which salary calculation depends, without which salary calculation is not possible. 2. Name few types of leaves? They are different types of leaves like: CL – Casual Leave SL – Sick Leave EL– Earned Leave etc. 3. What is Leave Encashment? It is exchange of unused leave for money. 4. What is OT? Overtime (OT) is the amount of time someone works beyond normal working hours. 5. What is Muster Roll? It is a Record of Attendance for a period for a set of employee’s. EPF 1. What is Provident Fund (PF) and when is it deducted from salary? Provident fund is calculated as a percentage of your salary (Basic pay and Dearness allowance if any max cut-off 15000, w.e.f 1st Sept 2014). The present rate is 12% and the same will be cut from your salary and a matching contribution will be paid from your employer reduced by contribution to your pension fund (Employer Contribution of 3.67% to PF, Employer Contribution of 8.33% to EPS). The amount will be refunded along with interest when you retire. If you are resigning you have the option of transferring the PF balance and continue with the other employer. 2. What is voluntary PF? Apart from 12%, an employee can contribute certain amount voluntarily to his PF fund which is called as Voluntary PF. 3. What is zero PS and when is it applicable? When an employee reaches an age of 58 and is still working, the contribution towards Pension Scheme is stopped and the entire contribution of employer is considered only for PF Fund. 4. What is company PF number? Company PF number is the account number which is allotted for a particular organization. For eg. consider this PF no. KA/98745. Here, KA is the regional code given and 98745 is the account number allotted for the organization. 5. What is PF/ESI Register? Register containing all necessary details of an employee registered under PF/ESI. 6. What is PF? A provident fund is a form of social safety net into which workers must contribute a portion of their salaries and employers must contribute on behalf of their workers. The money in the fund is then paid out to retirees or in some cases to the disabled who cannot work. 7. What is the Contribution for Provident Fund both by the Employer & Employee? The Employee contributes 12% of his /her Basic & DA & the same amount is contributed by the Employer. 8. How is PF calculation done? Calculation: Based on Basic + DA Employee Contribution of 12% to PF Employer Contribution of 3.67% to PF Employer Contribution of 8.33% to EPS Admin Charges (by Employer) for A/c-2, A/c-21 and A/c-22 9. Who will be covered by the Pension Scheme? Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsorily to join this scheme, provided his/her salary/wage is less than Rs 15000/- per month proposed and implemented soon. 10. What is a covered establishment? Covered establishment is an establishment belonging to the class of industries / other establishments, which have been listed in the schedule appended to the Employees’ Provident Fund and Miscellaneous Provisions Act 1952 and where 20 or more persons are employed. 11. Which form has to be filled while becoming member of provident fund? Form No 5 has to be filled to become a member of the Provident fund, form is available with HR department. 12. What is the provision of the scheme in the matter of nomination by a member? Each member has to make a nomination to receive the amount standing to his credit in the fund in the event of his death. If he has a family, he has to nominate one or more person belonging to his family and none other. If he has no family he can nominate any person or persons of his choice but if he subsequently acquires family, such nomination becomes invalid and he will have to make a fresh nomination of one or more persons belonging to his family. You cannot make your brother your nominee as per the Acts. 13. What is EPF and EPS? The EPF (Employees’ Provident Fund) is the most popular investment for salaried individuals, and is maintained solely by the Employees’ Provident Fund Organization of India (EPFO). As a rule, any company having more than 20 employees has to register with the EPFO. The contribution made by an employer towards PF is split into contribution towards PF (3.67%)and the Pension Scheme (8.33%). 14. Which form has to be filled while transferring provident fund deposit? You just have to fill form no 13 to transfer your PF amount. 15. When is an employee eligible to enjoy pension scheme? For an employee to become eligible for Pension fund, he has to complete membership of the Fund for 10 Years. 16. What does it mean by continuous service of ten years? When we say continuous service of 10 years in Employee Pension Fund, we mean to say that during services, for e.g., an employee who has worked with X company for say 3 years, then he resigned from that organization and joined Y company, wherein he worked for 2 years, then resigned from there to join establishment for 5 years but during these 10 years of service he has not withdrawn but transferred his Employee pension fund, then we say continuous service of ten years. 17. When can an employee avail the benefit of Employee pension fund scheme which he has contributed during his ten years of continues service. An employee can avail the benefit after completion of 58 years. 18. What is this 19 & 10C form? Form No 19 is for Provident fund withdrawal & Form No. 10C is for Pension scheme withdrawal. 19. How many years service is required to be eligible to receive member pension? Minimum 10 years eligible service will entitle for member pension. 20. Is employee the only beneficiary of Fund? Benefit will be paid to him/her and in his/her absence to his/her family. 21. What is the mode of payment of Provident Fund and Employees' Deposit Linked Insurance dues? Provident Fund & Employees’ Deposit Linked Insurance dues is paid by money order/ by deposit in payees’ bank a/c/ through employer/ by depositing the cheque in payees’ name or part of amount in annuity scheme in any nationalized bank. Payment by money order is allowed where the amount is not more than Rs. 2000/-. 22. What is meant by Family? Family means employees’ spouse and children below 25 years of age. 23. What are the various reports associated with PF? The different types of reports associated with PF are; PF monthly report – This is a report that needs to be generated every month and it contains the details of Employee Pf, Employer PF, VPF and PF Basic for the employee. Based the numbers appearing in this report, the company needs to make payments to the government every month. PF – Form 5 – This is a report that is generated every month. This gives a list of all employees who have joined the company in the current month. Based on an option setting, this report can also indicate all the employees whose payroll has been processed for the first time in this month. PF – Form 10 – This is a report that is generated every month. This gives a list of all employees who have left/resigned the company in the current month. Based on an option setting, this report can also indicate all the employees who have been settled in this month. PF – Form 12A – This is a report that is generated every month. This gives a summary of the number of employees currently covered under PF, total contribution for the month and other details PF Challans – The copy of challans in token of having remitted the Provident Fund dues in the bank- to be submitted along with form-12A every month. PF – Form 3A – This report is gene rated once a year. This report gives a summary of all the PF deductions (employee and employer) done for the employee in a given PF Year. PF – Form 6A – This report is generated once a year. You can think of this report as a summary of all Form 3A. This report gives the total deductions done for each employee in a given PF Year. 24. How does Voluntary PF work? Should we offer VPF option to employees? An employee informs the employer that he wants to contribute to VPF and the amount to be deducted towards VPF. The deduction is configured in the application and every month this amount will be deducted from the employee’s salary and transferred to the PF account. 25. What are PF Admin Charges? What is PF Admin Charges Percentage? Since government is managing the PF accounts of all employees, it charges administrative fees to the employers. These are called as PF Admin charges. PF Admin charges are generally a percentage of the total PF Basic. This is called as PF Admin percentage. 26. What is the link between PF and Income Tax? As per Indian Tax laws, any contribution done by the employee towards PF, can be considered as an investment under Chapter 6. This can help reduce the tax liability of the employee while offering a decent return on investment. 27. What is Employee Pension Scheme or EPS? The contribution made by an employer towards PF is split into contribution towards PF and the pension scheme. 28. Is PF compulsory to Pvt. Ltd. Company? PF is mandatory only when: Total number of employees touch the figure of 10 All of them should have worked for 3 months continuously Any one of 10 employees have a salary less than Rs 15000/- p.m Once registered then you are required to file returns for all time to come 29. Is PF applicable to everyone? Does every employee contribute to PF? According to the PF rules, all employees who draw a PF Basic of less than 15000 must contribute to PF. This is mandatory. For employees having PF Basic more than 15000, the deduction/contribution is voluntary. If they want, they can opt for the deduction. Else, there need not be any deduction (from both the employee and employer perspective). 30. Can you explain the various terms and concepts related to PF? Provident Fund (PF) – A savings scheme mandated and administered by the Government of India Employee PF, employee contribution – According to PF rules, an employee is supposed to contribute a certain percentage (12%) of his basic salary as PF. This is normally called as PF or Employee PF. Employer PF, employer contribution – Just like the employee, the employer also makes a contribution (12%) towards PF in the employee’s favor. This is called as Employer PF. PF Number – Every employee and employer is assigned a unique identification number called the PF number. This is similar to a bank account number and required for checking the PF balance or for any other transactions. PF Basic – This is the salary component (usually the Basic) on which the amount of PF is to be deducted. It could also be a sum of mule salary components like (Basic + DA). PF Gross – See PF Basic PF Year – PF accounting is done from March to February of every year. This period is called as PF Year. Voluntary PF (VPF) – An employee can decide to save a much higher amount towards PF. There is no need for a matching contribution from the employer since this is purely voluntary. Employee Pension Scheme (EPS) – A pension scheme 31. What should I do when I change my job? And what should be done when I quit my job without joining elsewhere? The PF balance could be transferred from one employer to another. The existing balance would continue to stay, with fresh contributions made by the new employer. When you quit your job, the PF could be withdrawn. 32. Employee is a member of The Employees' Pension Scheme. What are his duties? He should provide his employer with such details as would be required for the scheme purposes. He should submit his scheme certificate to his new employer if he changes his employment. 33. What is the current interest rate on EPF Account? The Central government revises EPF interest rates every year depending upon the revenues made by EPFO on its previous years’ deposits. For FY13-14, the EPF interest rate is 8.75 per cent. 34. What are PF Admin Charges? What is PF Admin Charges Percentage? Since government is managing the PF accounts of all employees, it charges administrative fees to the employers. These are called as PF Admin charges. PF Admin charges are generally a percentage of the total PF Basic. This is called as PF Admin percentage. 35. What is Member Portal? Member Portal is for Employee, where Employee can check own PF Status. 36. What is E-Passbook? E-Passbook is the employee Provident Fund status book (PDF). Employee can check own PF status. 37. Who can register on the member portal? Any member of the employee’s PF can register. 38. Can a PF member working for an establishment exempted under the EPF scheme? No, the PF accounts in such case are maintained by the respective trust and passbook for such member cannot be displayed through the member portal. 39. What is past service pension? This pension is for the period of membership of the Employees’ Family Pension Scheme, 1971. 40. What is UAN? UAN stands for Universal Account Number. The UAN will act as an umbrella for the multiple Member Ids allotted to an individual by different establishments. The idea is to link multiple Member Identification Numbers (Member Id) allotted to a single member under single Universal Account Number. This will help the member to view details of all the Member Identification Numbers (Member Id) linked to it. If a member is already allotted Universal Account Number (UAN) then he / she is required to provide the same on joining new establishment to enable the employer to in-turn mark the new allotted Member Identification Number (Member Id) to the already allotted Universal Identification Number (UAN). 41. What is the procedure to Register for UAN? Log to: http://uanmembers.epfoservices.in/index.php Activate your UAN base Registration Fill the UAN provided by HR Dept. Enter your mobile number Enter your member ID, select state & PF office as applicable First two alpha fields will be filled automatically, third field has to be enter as shown in your PF slip Enter the character shown in the text box. Click on get pin You will get PIN to your mobile number Enter the same and check on “I agree”. Follow the instructions as indicated in the website. 42. How employer can see the UANs allotted to its members? Yes, employer can very much see the UANs allotted by EPFO to the members of his/her establishment. He /she have to go to the UAN Menu, where there is an option ‘Download UAN List’. Just click ‘Download UAN List’; you will be able to see the UANs allotted to your members at a glance. If you want to download the PDF of the same, there is an option at the RHS of the page with hyperlink to download. Press this hyperlink, you will be moved to 5 options to download. Select as per your requirement and download the same. 43. Is there any change in the Online ECR Return Filing through ECR Portal? No, there will not be any change in filing online ECR Return through ECR Portal. 44. Do employer has to still allot new member id to new employees? Yes, new member id has to be allotted as per the existing process. 45. What is the procedure to give UAN to new employees? After successful ECR submission and remittance of the same in bank, the list of the employees without UAN in that ECR will be available in ‘Confirm Previous Employment’ link for either declaring previous employment details or fresh employment on the basis of Form – 11 submitted by new member. Once it is approved by the employer, this information will be pushed to EPFO for UAN allotment/linkage accordingly. Newly allotted UAN List will be populated on the portal under the option ‘Download UAN List’ 46. Can employer download the list of UAN by its creation? Yes, employer has an option to download the UAN by its creation/ascending order/descending order/distribution. 47. Can employer search UAN of other establishments? Yes, employer can search UAN of other establishments by selecting an option ‘Search UAN’ in the UAN Menu using either Member ID or UAN. 48. Which documents are considered for KYC? Following documents can be used for KYC: National Population Register AADHAR Permanent Account Number Bank Account Number Passport Driving License Election Card Ration Card 49. What are the methods for uploading KYC? KYC can be uploaded in following manner: Individual KYC Upload Bulk KYC Text File Upload 50. What is Bulk KYC Text File? If employer has more than one case for uploading KYC, he can choose Bulk KYC Text File Upload rather uploading it individually. In case of Bulk KYC Text File Upload, he/she will have to make a text file as per the standard format given by EPFO and upload the same. 51. What is the structure for uploading of Bulk KYC text File? Structure is being mentioned in the User Manual for Employers. 52. Is digital signatures mandatory for uploading KYC? No, Employer can upload KYC without having digital signature. But at the time of approval of KYC, digital signatures are mandatory. 53. Is a digital signature mandatory for approving KYC? Yes, for approving KYC digital signatures are mandatory. 54. Can employer view the Bulk KYC files uploaded wrongly? Yes, KYC files uploaded wrongly due to the not abiding by the instructions mentioned in the Manual by the employer can be viewed in KYC Menu under the head ‘Error List’ wherein Errors along with the file details can be viewed. 55. Can multiple KYC of same member be given in one KYC text file? Yes, multiple KYCs of same member can be uploaded in one KYC Text File. However for each KYC of the same member an additional row (line) has to be created in the text file. 56. What if KYC of member is uploaded wrongly by the employer? If KYC document of any member is uploaded wrongly by the employer, he/she has an option to upload and approve again the correct KYC of that member. In that case, the wrong one (previous) will reflect in history and the current KYC will be considered for all the purposes. If any transaction is held during the period of wrong KYC, it will be the responsibility of employer. 57. Is there a need for the scanned copies of the KYC document? No, there is no need for the scanned copies of the KYC document. 58. Which name is to be given in Bulk KYC text file/individual KYC uploads, in case of difference of name in KYC document and in EPFO database? Employer has to feed the name as per the KYC document only. Side by side, employer will have to follow the separate procedure already laid down for change in name in our master. 59. What is the procedure for correction in Name in EPFO Database? EPFO has made a provision for change the name of EPF members in the application software. Members who wish to get their name to be changed in the EPF Database can apply for the same through their employer along with supporting documents. In this regard a circular has already been issued to the field offices mentioning the supporting documents and the process flow. 60. What will be the procedure for KYC of newly joined members in an establishment? If an employee joins an establishment, employer can submit his/her KYC through ‘Individual KYC Upload’ or ‘Bulk KYC Text File Upload’. If employee declares his/her previous employment and KYC uploaded by previous employer is available, present employer can also verify it. 61. What are the documents to be submitted along with the Employer’s Registration Form? Documents relating to the constitution of the Factory/Firm/Establishment, evidence in support of the date of commencement of production/business/first sale, List of partners/ Directors with their addresses, address proof like pan card/pass port/voter identity card, month-wise employment position etc. are the essential documents. 62. What is contribution? Contribution is the sum of money payable to the Corporation by the Principal employer in respect of an employee and includes any amount payable by or on behalf of the employee in accordance with the provisions of the Act. ESI 1. What is Employee State Insurance (ESI)? ESI is contributed from both the sides Employee as well as Employer. It is been calculated on the basis of Gross salary per month and the maximum ceiling is 15000 Rs/Month. The contribution from both the sides is as below: Employee Side-1.75% of gross/month Employer side- 4.75% of gross/month 2. What is Employees State Insurance Corporation (ESIC)? Employees State Insurance Corporation (ESIC) has been formed to supervise the scheme under section 3 of the Act. The corporation supervises and controls the ESI scheme. 3. What is ESI? ESI refers to Employee State Insurance. This is an insurance scheme run by the government. In this scheme, an employee contributes part of his salary as an insurance premium. Along with the employee, the employer also contributes to the scheme. The government collects this money and operates ESI hospitals. Whenever an employee falls sick, he can go to these ESI hospitals and avail free treatment. 4. Why ESI it is necessary? Employment State Insurance is a social program that contributes to the insurance fund of all workers by providing assistance to workers and their family who need the medical assistance. 5. How ESI is assigned to the Employee? First of all we make the ESI option enable on company level. The ESI account and ESI max amount should be declared on the PF/ESI/PT configuration form. The pay code which is being assigned to the employee should be part of ESI gross and then ESI option should be enabled on Employee level. 6. What benefits do the employers avail under the Scheme? The various benefits that the employers reap out of the Scheme are: No expenditure to be incurred towards administration of medical care to the employees /their dependants No requirement for medical insurance policy as all medical facilities, including Super Specialty treatment is extended to the beneficiaries, without any ceiling on expenses. Employers are exempted from the provisions of / liabilities under: Maternity Benefit Act Employees ‘Compensation Act 7. Which of the employees are eligible to avail benefits under the Scheme? All employees of a covered unit, whose monthly remuneration (excluding overtime) does not exceed Rs.15, 000/-per month, are eligible to avail benefits under the Scheme. 8. Who is responsible for the administration of the Scheme? The Scheme is administered by the Employees State Insurance Corporation, set up under the ESI Act, 1948. The Corporation (similar to Board of Governors) the comprises of representatives of the employers, employees, the Central Government, State Governments, eminent medical professionals and that of the Parliament. Besides the Corporation, there is a Medical Benefit Council which advises the Corporation on matters related to the extension of medical care to the beneficiaries of the Scheme. 9. To whom is the Scheme applicable to? The Scheme is applicable to only those areas where the Scheme is extended / made applicable by the State Government by notification. The Scheme applies to all factories, shops and establishments located in the implemented areas, where ten or more Persons are employed. Thus, the Scheme is applicable to all factories, shops, hotels, restaurants, cinema theatres, offices, medical institutions, educational institutions, etc. Subject that: The employer is located in an area to which the Scheme is extended to by the State Government. Ten or more persons are employed 10. Is it mandatory for the Employer to register under the Scheme? Yes. It is the statutory responsibility of the employer under Section 2A of the Act read With Regulation 10-B, to register the Factory/Establishment under the ESI Scheme Within 15 days from the date of its applicability to them 11. How should an employer register as per the provisions of the ESI Act? Any employer who becomes coverable under the Act can register online (www.esic.in) and get registered. While registering online, the employer has to give correct and complete details. (The employer would be contacted through the email for communicating the access credentials to the employer portal, reset of password, etc.); once registered, the employer will be allotted a 17 digit employer code. Except for employers who supply manpower, all the employers can proceed with the compliance under the Act, without even visiting the ESI offices, as all activities, like registering the employees employed, filing contribution, generating challan for remitting contribution, filing periodical returns, etc. can be done online. 12. Once registered, can an employer edit the details already furnished online? As regards details pertaining to the employer, like name of the employer, address, etc., the employer may submit a request online, supported by documentary evidence, and on approval by the competent authority, the change will get effected in the system. As regards details pertaining to the employees registered by the employer, except for the name and insurance number of the employer, all the other details, including dependant details, address of the employee, etc., can be edited by the employer 13. Is it necessary to register temporary employees, casual labour, etc., employed by the employer apart from registering the employees on their roll? Yes. All employees, including casual labour, temporary employees, employees employed through contractors (outsourced) etc. have to be registered by the employer. 14. Are there any other exemptions in respect of any special category of employees? Yes. In respect of employees whose average daily wages is less than Rs.250 per day, the employee’s share need not be paid. However, the employer’s share (4.75% of the wages) Need to be paid. 15. What are the max limits of ESI? At present the ESI Limit is Rs.15000, this can be modified from configuration. 16. What are the accounts ESI viz. Employee part and Employer part? In ESI fund, Employee deduction and Employer deduction are deposited. 17. What is the time limit for payment of contribution? Contribution shall be paid in respect of an employee in to a bank duly authorized by the Corporation within 21 days of the last day of the calendar month in which the contribution falls due for any wage period. 18. What are the percentages of above accounts? Employee account is 1.75% and employer account is 4.75% of ESI GROSS. 19. How ESI is calculated and distributed among Employee and Employer accounts? If employee’s ESI GROSS is less than or equal to 15000 then ESI would be calculated as follows. If ESI GROSS is Rs. 10000 and payable days are 30 and calendar month is 30 then Employee’s part is (10000*30/30)*1.75/100 .Similarly Employer part would be (10000*30/30)*4.75/100. 20. What is the ESI gross salary? It is sum of the amount of the earnings of the pay codes which are part of ESI GROSS. 21. What are the various ESI forms? Forms are Monthly ESI statement, ESI Challan, Monthly ESI return, Form 5 and Form 6, ESI Declaration Form. 22. What is the ONLINE ESI CHALLAN? When Challan is created online then it is online ESI challan , in that case we have to upload the ESI Gross of each employees only. 23. What is the manner of payment? The total amount of contribution (both the shares) in respect of all the employees for each month is to be deposited with the authorized bank branches in cash or by cheque through a challan or demand draft in the prescribed form in quadruplicate. Challan prescribed for this purpose shall be supplied free of cost by the Concerned Branch Office on placing the indent. 24. What is ESI Scheme? It is a comprehensive Social Security Scheme designed to accomplish the task of protecting the ‘Employees’ in the organized sector against the hazards of sickness, maternity, disablement and Death due to employment injury and to provide medical care to the insured employees and their families. 25. What is ESI Gross Salary? Generally all the income components paid to an employee is considered for ESI Gross computation. 26. What is the other rules governing ESI? ESI contribution stops when the employee’s gross income crosses Rs. 25000 proposed and implemented soon. This stoppage of ESI cannot happen in any month. The changeover from ESI-deduction to no-ESI-deduction can happen only in 3rd (March) or 9th (September) month only. i.e. even if an employee’s salary crosses, 25000 in July, he will continue to have ESI deduction until August. The comparison of income is done with Full Income and the calculation of ESI is done on the actual payout (income). 27. What are the Forms used in ESI? Form 5: Half yearly return of each Employee details of his attended days, wages earned, contribution, dispensary. Form 6: Half yearly return of contribution and remittances. 28. Where do Employees' State Insurance Funds come from? The Employees’ State Insurance Funds are primarily built out of employer’s as well as employee’s contribution payable monthly as a fixed percentage of wages. 29. How are the employees registered under the Scheme? Simultaneously with his/her entry into employment in a covered factory or establishment, an employee is required to fill in a Declaration Form. The employee is then allotted a Registration Number, which distinguishes and identifies the person for the purposes of the Scheme. A person is registered once and once only upon his entry in insurable employment. 30. How does the Employees' State Insurance Scheme assist you? An interruption of money even for a small period is a hardship in a modern economy. For example, an employee met with an accident and had hospitalized for 6 months. Employee won’t get salary at the time of hospitalization indeed dependants has to pay the medical bills too. This sort of inconvenience and interruption are inevitable in every body’s life. By coming forward to provide health protection and income maintenance in a series of often experienced contingencies like sickness, maternity, disablement and death due to employment injury, the Employees’ State Insurance Scheme tends to ameliorate your economic anxiety and to be a friend in need and distress. Gratuity 1. What is gratuity and how is it calculated? Gratuity is a Lump-sum amount given by an employer to an employee, only after completing a service of 5 years and even at the time of retirement. It is calculated on-> ((((Basic wages)/26)*15)*No. of years served) PT 1. What is PT? It is a tax collected by the government from the entire employees of the organization. It is state specific. 2. What is Profession Tax? If you are a professional or a working individual of a reputed organization, then you are required to pay professional tax. Professional tax in India is a state-level duty. In India, this tax is imposed by various states. It is imposed on business owners, working individuals, merchants and people carrying out various occupations. Few states that impose this levy in India are Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamilnadu, Gujarat, and Madhya Pradesh. 3. On what basis PT is calculated on? PT is calculated on gross salary. 4. What are the rates at which tax is to be deducted? Tax rate varies depending upon monthly salary / wage of an employee. The rates of tax vary from state to state. 5. What are the reports generated for PT? Each state has different reports based on the periodicity of PT deduction. I can the Monthly, Quarterly or Half Yearly. 6. What are the categories that a person is liable for Profession Tax? The categories of persons liable for Profession Tax are any individual, a Hindu Undivided Family, firm, company, corporation or other corporate body, any society, club or association. 7. Who is assessed under Profession Tax Act? An employer liable to pay Profession Tax is assessed under Profession Tax Act. 8. Who is liable to deduct profession tax? It is the responsibility of the employer to cut professional tax from the salary every month and pay it to the state government. 9. How to Register for Professional Tax? Apply for the Registration Certificate to your state’s tax department within 30 days of employing staff for your business If you have more than one place of work, apply separately to each authority as regards the place of work coming under the jurisdiction of that authority 10. Is there any Exemption in PT? Senior Citizen above 65 years age is tax exempt. Person suffering from permanent physical disability. Parent of a child suffering from physically disability. Parent of a mentally retarded child. 11. What is the penalty of non-payment of PT? Penalty for non-registration in case of employer – Rs.1,000/-, In case of other persons Rs.500/-. Penalty for non filing of Returns for an employer Rs.250/-. Penalty for non-payment of tax by enrolled person and registered employer with interest at rate of 1.25% per month and Penalty not exceeding 50% of the tax amount due Payroll 1. What is a Pay Slip? It is a record of Salary for a month for a particular employee. 2. What is Bonus? It’s a share of profit given to an employee by the employer. Calculation is done on earned Basic+ DA (Min of 8.33% and maximum of 20%). 3. What is Ex-Gratia? It is an amount similar to bonus, but paid to those employees who are not eligible for bonus. 4. What is Standing Instruction? It is a standard instruction for amount to be paid on behalf of another person. The employee can give a standing instruction to the employer for repayment of loan, advance, insurance etc. 5. What is CTC? COST TO COMPANY or CTC is an amount spent by the company spends for hiring and employing the employee. Reimbursement 1. What is Reimbursement? Reimbursement is an act of compensating someone for an expense done. The claim can be got only after spending the money. Some of the common reimbursement claimed is Medical, LTA, Telephone etc. Salary 1. What is salary? A fixed regular payment typically paid on a monthly basis made by an employer to an employee. 2. What is difference between wages and salaries? Wages are often associated with production employees, whose pay is dependent on hours worked. Salaries are associated with office employee like manager, executives etc. 3. What is conveyance? It is an allowance given for traveling from home to work place with an tax exemption of is Rs. 800 per month. 4. What is Salary Sheet? It is the Record of Salary for a month for all employees. TDS 1. What is Children education/hostel allowance? It is a allowance given by the employer to the employee for the purpose of the employees’ children education and hostel stay. Children Education Allowance is tax exempted up to Rs. 100/- per month per child max for two children. Children Hostel Allowance is tax exempted up to Rs. 300/- per month per child max for two children. 2. What is Tax? It is the duty collected by the government for the development of the country. 3. What is Income Tax? It’s tax collected by the central government from all who have any kind of income. 4. What are the types of taxes? The different types of taxes are: Direct Tax —->it is a tax directly imposed on any individual or an entity, and paid to the govt. E.g.: Income tax, Wealth Tax, Custom Duty, etc. Indirect Tax—>It is a tax paid through third party and not directly. E.g.: VAT, Entertainment Tax, Luxury Tax, etc. 5. What is TAN? TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. 6. What is PAN? PAN – Permanent Account Number is a ten-digit alphanumeric identifier, issued by Income Tax Department. Each tax assessee is issued a unique PAN. 7. What is Salary Extrapolation? It is a mechanism of Approximation of future salary based on present pay. This is mainly used for TDS estimation purpose. 8. What is TDS? Tax deducted at source is a process where employer deducts an amount of tax from the salary of an employee on monthly basis and pays it to the government. 9. What is Exemption in TAX? A part of payment which will not be taxed is exemption. E.g: Conveyance – Rs. 800 per month & for physically handicapped – Rs. 1600 per month Medical reimbursement- Rs. 15000 per year (with valid medical bills) 10. What is Form 16? Form 16 is a Certificate for TDS done from the salary of the employee and issued by the employer under section 203 of Income Tax Act. 11. What is Perquisite? A benefit which an employee enjoys or is entitled to on account of one’s job or position. E.g.: rent-free accommodation, free electricity, gas and water supply, free domestic servant provided/paid by the employer etc. 12. What is Perquisite and how it is taxed? Perquisites or perks are emoluments or benefits received from an employer, in addition to salary. For example, rent-free accommodation, free electricity, gas and water supply. They are taxed depending on certain criteria for specific type of perks. For eg. Any gift given by the employer which exceeds the value of Rs. 5000 per annum is taxable in the hands of the employee 13. How to calculate House Rent Allowance (HRA) and exemption? Out of the House Rent Allowance or HRA received as a portion of salary during the year, lowest among the three following amounts is exempted from tax 40% of Basic salary (50% for Metro city) Rent paid –10% Basic salary HRA allowance actually received 14. What is the different deduction as per Chapter VIA? The different types of Chapter VIA deduction are; 80C – Amounts given towards LIC Premium, contribution for recognized, ESI, PF and Mutual funds subscriptions, Super annuation fund, etc. with a deduction to the extent of Rs. 1,00,000 80D – For Medical Insurance : Deduction on premium paid, up to Rs. 15,000 for self (if age is less than 60 years) and Rs.20,000 if senior citizen. 80DD– Medical treatment for Handicapped Dependant: Deduction on medical treatment and maintenance of handicapped dependant up to Rs.50,000 for disability below 80% and Rs. 1,00,000 for disability above 80% 80DDB– Medical treatment for Specified Illness or Diseases: Deduction in case of medical treatment for specified illness or diseases. Deduction in case of medical treatment for specified illness/diseases is to an extent of Rs. 40,000 in the general category and Rs. 60,000 for senior citizen. 80E– Interest on Education Loan: When an employee is repaying interest on loan borrowed to pursue his or her own higher education, it is eligible for deduction. For such deduction, the limit is not specified. 80U– Permanent Physical Disability: Assessee certified by the medical authority to be a person with permanent physical disability is permitted for a deduction of Rs. 50,000, and if the assessee is certified as having severe permanent physical disability, then the deduction is Rs. 1,00,000. 80G– Donations: For deduction in respect of donations to funds like National Defense Fund, Prime Minister’s National Relief Fund, etc., the employee can claim the deduction while filing individual returns 80CCG- Investment in Rajiv Gandhi Equity Linked Infrastructure Bond as specified by Gov. of India. This has an exemption Limit of 25000 or 50% of investment, whichever is least. This exemption will be applicable for only 1st year investment. 80QQB- Royalty Income for the author. This has an exemption Limit of 15% of value of book or actual income, whichever is less
