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What is Payroll?

Payroll is the term used for the compensation a business must pay to its employees for a set period of time or on a given date.

Which Components comes under Non-Taxable Wages?

Health or retirement benefits that are paid before taxes known as Non-taxable wages.

What is the contribution or deduction percentage for PF?

According to the Employees Provident Fund (PF) and Miscellaneous Provisions Act, 1952, an employee needs to contribute 12% of PF Gross as PF contribution.
The employer also needs to contribute 12% of the PF Gross as a contribution to the employee's account.
The rate is generally published by the government. In case there is a change in the percentage then we can make the modifications in the PF and Employer PF formula.

Does every employee contribute to PF?

According to the PF rules (as of 2004), all employees who draw a PF Basic of less than Rs. 15000 have to contribute to PF. This is mandatory. For employees having PF Basic more than Rs. 15000, the deduction/contribution will be on 15000. However in most companies, PF is applicable to all employees. There are exceptions (people who do not contribute) but these are few.

What is PF Year?

PF accounting is done from March to February of every year. This period is called as PF Year. This is applicable only to PF and does not have any effect in any other modules.

What are the rates for contribution (deduction) to ESI

For employees, ESI deduction rate is 0.75% of the ESI Gross salary.
For employer, ESI contribution is at the rate of 3.25% of the ESI gross salary.

Contribution period Corresponding Cash Benefit period?

There are two contribution periods each of six months duration and two corresponding benefit periods also of six months duration as below:
1st April to 30th September - 1st January of the following year to 30th June.
1st Oct to 31st March - 1st July to 31st December of the year following.

What is the maximum income limit for getting rebate under Section 87A?

The maximum limit for getting rebate under Section 87A is now changed to ₹ 3.5 lakh from ₹ 5 lakh

What is Professional tax and who levies it?

The nomenclature ‘Professional tax’ could be one of those terms which do not completely convey the real meaning of the term. Unlike the name suggests, it is just not the tax levied only on professionals. It is a tax on all kinds of professions, trades, and employment and levied based on the income of such profession, trade and employment. It is levied on employees, a person carrying on business including freelancers, professionals, etc., subject to income exceeding the monetary threshold if any.

Professional tax rate?

Professional tax being levied by the State Government is different in different states. Every state has its own laws and regulations to govern professional tax of that particular state. However, all the states do follow slab system based on the income to levy professional tax.
Professional tax rate slabs in Karnataka

Monthly salary/wage upto ₹ 15,000	NIL
Monthly salary/wage > ₹ 15,000	₹ 200 per month

What is the due date for Professional Tax Monthly Returns

20th of Every Month

What is LWF?

Labor Welfare Fund (LWF) is administered by the Ministry of Labor, government of India, in order to provide social security to unorganized labors. It is a deduction made from the employee's wages as well as from the employer.

What is the Scope of LWF act?

LWF Act includes housing, family care and worker’s health service such as giving medical examinations, a clinic for general treatment, infant welfare, women’s education, workers activity facilities, marriage, education, funeral, etc.

What are the documents required for PT Registration in Karnataka State?

a) Memorandum Of Association & Incorporation Certificate
b) PAN Card
c) Lease Agreement
d) Bank Details with Cancel Cheque
e) Employer Address Proof and ID Proof
f) Email address and Phone Number
g) INR 2500/- for Enrollement Fees
h) Two Photo Graphs of the Employer
i) List of employees with Gross Salary

What is the due date for Filing ER1 Quarterly Returns?

30th April, 31st July. 31st October. 31st January.

What are the documents required for PF Withdrawal?

a) Cancel cheque b) Form 15G

What are the document required for PF death claim?

1. Answer: Death Claim form. 2. Particulars of Nominees and Claimants. 3. Photographs & Bank details of Nominees and Claimants. 4. Death Certificate. 5. Serviving FAMILY Members Certificate, 6. Form 5 and Form 10, 7. Form 3A 8. Non Employment Certificate. 9. Declaration for” Death while in Service”

What are the documents required for Professional Tax Registration in Karnataka?

1) Company PAN card.
2) Aadhar card

Professional tax rate slabs in Maharashtra?

Professional Rates
Salary (INR)	PT Amount	Remarks
Upto 7500	₹ 0.00	Nil
₹7501 - ₹10000	₹ 175.00	Nil For Women
Above 10001	₹ 200.00
Above 10001	₹ 300.00	Employer has to deduct on February month only

Professional tax rate slabs in West Bengal

Professional Rates
Salary (INR)	PT Amount	Remarks
Upto 8500	₹ 0.00	Nil
₹8501 - ₹10000	₹ 0.00	Nil
₹10001 - ₹15000	₹ 110.00
₹15001 - ₹25000	₹ 130.00
₹25001 - ₹40000	₹ 150.00
Above 40001	₹ 200.00

Professional Tax Registration and Returns

Professional Tax Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. Professional tax needs to be deducted from the salary or wages paid amount. Application for the Registration Certificate should be made to the assesse's state tax department within 30 days of employing staff for his business. If the assesse's has more than one place of work, then application should be made separately to each authority with respect to the place of work under the jurisdiction of that authority.
Applicable States:-
a) Andhra Pradesh
b) Jharkhand
c) Maharashtra
d) Nagaland
e) Sikkim
f) West Bengal
g) Assam
h) Karnataka
i) Manipur
j) Odisha
k) Tamil Nadu
l) Bihar
m) Kerala
n) Meghalaya
o) Puducherry
p) Telangana
q) Gujarat
r) Madhya Pradesh
s) Mizoram
t) Punjab
u) Tripura

Please let us know the deduction summary for IT savings.

Section	Deduction on	Allowed Limit (maximum) FY 2018-19
80C	Investment in PPF – Employee’s share of PF contribution – NSCs – Life Insurance Premium payment – Children’s Tuition Fee – Principal Repayment of home loan – Investment in Sukanya Samridhi Account – ULIPS – ELSS – Sum paid to purchase deferred annuity – Five year deposit scheme – Senior Citizens savings scheme – Subscription to notified securities/notified deposits scheme – Contribution to notified Pension Fund set up by Mutual Fund or UTI. – Subscription to Home Loan Account scheme of the National Housing Bank – Subscription to deposit scheme of a public sector or company engaged in providing housing finance – Contribution to notified annuity Plan of LIC – Subscription to equity shares/ debentures of an approved eligible issue – Subscription to notified bonds of NABARD	₹ 1,50,000
80CCC	For amount deposited in annuity plan of LIC or any other insurer for a pension from a fund referred to in Section 10(23AAB)	-
80CCD(1)	Employee’s contribution to NPS account (maximum up to ₹ 1,50,000)	-
80CCD(2)	Employer’s contribution to NPS account	Maximum up to 10% of salary
80CCD(1B)	Additional contribution to NPS	₹ 50,000
80TTA(1)	Interest Income from Savings account	Maximum up to ₹ 10,000
80TTB	Exemption of interest from banks, post office, etc. Applicable only to senior citizens	Maximum up to ₹ 50,000
80GG	For rent paid when HRA is not received from employer	Least of : – Rent paid minus 10% of total income – ₹ 5000/- per month – 25% of total income
80E	Interest on education loan	Interest paid for a period of 8 years	15
80EE	Interest on home loan for first time home owners	₹ 50,000
80CCG	Rajiv Gandhi Equity Scheme for investments in Equities	Lower of – 50% of amount invested in equity shares; or – ₹ 25,000
80D	Medical Insurance – Self, spouse, children Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old	– ₹ 25,000 – ₹ 50,000
80DD	Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent – Disability is 40% or more but less than 80% – Disability is 80% or more	– ₹ 75,000 – ₹ 1,25,000
80DDB	Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD – For less than 60 years old – For more than 60 years old	– Lower of Rs 40,000 or the amount actually paid – Lower of Rs 1,00,000 or the amount actually paid
80U	Self-suffering from disability : – An individual suffering from a physical disability (including blindness) or mental retardation. – An individual suffering from severe disability	– ₹ 75,000 – ₹ 1,25,000
80GGB	Contribution by companies to political parties	Amount contributed (not allowed if paid in cash)
80GGC	Contribution by individuals to political parties	Amount contributed (not allowed if paid in cash)
80RRB	Deductions on Income by way of Royalty of a Patent	Lower of ₹ 3,00,000 or income received

What is CTC?

CTC stands for Cost to Company. It includes all the costs related to an employment contract and covers all compulsory deductibles including deductions for provident fund, medical insurance, etc. These deductibles form a part of your compensation structure, but you do not get them as a part of the in-hand salary.

Whether overtime earning to be considered for wage limit?

No. As over time earning is not a regular and continuous payment, it cannot be considered while calculating the wage limit. However, while considering the gross for contribution, this has to be included.
For example, let us assume an employee gets a salary of Rs. 20,000. As per the revision, this employee will be covered under the ESI Scheme. Next, let us assume that the employee has worked for overtime on a particular month. Hence, based on the overtime the monthly wage has turned out to be Rs. 24,000 for that particular month. So in such a scenario, Rs. 24,000 will not be considered while calculating the wage limit for the ESI Scheme. But, this amount will be considered while calculating the gross for the contribution.

What do you mean by income tax

This is taxes an individual or a Hindu Undivided Family or any taxpayer other than companies, pay on the income received. The law prescribes the rate at which such income should be taxed.

What are the income tax rates defined for old and new tax regime?

Income Tax Slab	Old Regime	New Regime	Surcharge Rates
₹0 - ₹2.5 lakh	exempted	exempted	0
₹2.5 lakh - ₹5 lakh	5%	5%	0
₹5 lakh - ₹7.5 lakh	20%	10%	0
₹7.5 lakh - ₹10 lakh	20%	15%	0
₹10 lakh - ₹12.5 lakh	30%	20%	0
₹12.5 lakh - ₹15 lakh	30%	25%	0
₹15 lakh - ₹50 lakh	30%	30%	0
₹50 lakh - ₹1 crore	30%	30%	10
₹50 lakh - ₹1 crore	30%	30%	15
₹2 crore - ₹5 crore	30%	30%	25
₹2 crore - ₹5 crore	30%	30%	37

What is the difference between old and new regime?

The key difference between the old regime and new regime is in tax rates and the number of available exemptions. The new regime has lower tax rates and fewer exemptions available than last financial year’s i.e., old regime.

Which are the unavailable exemptions under the new regime?

The new regime includes lower taxation rates than last financial year. However, under the new regime following exemptions are unavailable:

Under section 16 - Standard Deductions, Entertainment Allowances, Employment/ Professional tax
House Rent Allowance (HRA).
All chapter VIA section - 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EEA, 80EEB, 80G etc {Excluding Section 80CCD(2)}.
Leave Travel Concession (LTA).
Under section 10(14) - Special Allowance such as Children Education Allowance, Hostel Allowance, Transport Allowance, Uniform Allowance, etc.
Under section 24 - Interest on borrowed loan for a self-occupied property.
Set off of any loss, under the head “Income from house property” with any other head of income.

What are the similarities between old and new regime?

The following calculations are common for both the old and new regime:

Rebate under section 87A: Taxpayers with an annual income of up to Rs 5 lakh will continue to get the tax rebate of Rs 12,500 on the calculated tax.
Health, Education Cess, and Surcharge Rates remain the same.

I have already run several weeks of payroll using my old system. Will I be able to transfer the data to People2Pay Payroll?

Yes, a data transfer facility is built into People2Pay Payroll that allows you to easily import data from excel files.

Are the Payslip’s password protected?

Yes, this feature is available People2Pay. Data security is our first priority.

Is there any option that employees can access payslip and other data in mobile application?

Yes, People2Pay provides access to all payroll, leave and attendance module access via mobile application.

What is the support mechanism in People2pay?

We offer support through telephone and email

States following LWF?

The states on which the LWF Act is implemented

Andhra Pradesh
Chandigarh
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Odisha
Punjab
Tamil Nadu
Telangana
West Bengal

What is the due date for Filing the List of Holidays?

List of Holidays filing Every Year 31st December

What is due date for filing the LWF returns in Karnataka?

LWF should filing every year 15th of January

What is the due date for filing the ESIC and PF Monthly Returns?

15th of Every Month.

What is the due date for Filing Bonus Annual returns?

Every year 1st February.

What are the documents required for Shops and Commercial Establishment Registration in Karnataka?

a) Identity / Address Proof of the owner(Aadhar card/ Driving license/Voter Card etc.) b) Incorporation Certificate /Memorandum of Article (In Case of Private Ltd. Company) c) Authorisation letter for Authorised signatory / self attestation Letter for Owner.

Professional tax rate slabs in Andhra Pradesh?

Professional Rates
Salary (INR)	PT Amount	Remarks
Upto 15000	₹ 0.00	Nil
₹15001 - ₹20000	₹ 150.00
Above 20001	₹ 200.00

Concept of Employees’ Provident Fund

EPF is a welfare scheme brought into force to secure a better future for employees. It is a statutory benefit available to the employees post retirement or when they leave the services. In case of deceased employees, their dependents will be entitled for the benefits. Under the Employees’ Provident Fund Scheme (EPF Scheme) both employers and employees have to make their contributions towards the Fund. Interest earned on the amount is credited to the member’s Provident Fund Account (PF account) and is available to the employee at the time of retirement or exit from employment as the case may be, provided certain conditions are fulfilled.

Types of schemes under the Act