i want to know abut esi deduction, we r deucting esi of gross sal(basic+d.a+HRa+other allownces)
but some senior HR Professional having the rank of DGM HR in a big org. told Me that we are wrong he say that for ESI Deduction we can't take HRA. is he right.
second for esi coverage min. emp strength required is still 20 with power.
If money is paid directly to employees under the label "HRA", this will be treated as wage and contribution has to be paid. But if you provide a free house or hired house and company pay the rent directly to the land loard, no contribution is required for this, though for Income tax purpose this will have to be considered. Simply stated, what is provided in Kind is not wage and what is provided in cash is wage.
Regarding washing allowance, if wearing of Uniorm is compulsory for employee, then a reasonable amount as washing allowance is not required to be taken for payment of contribution. But if you provide a disproportionate amount under the head washing allowance or where washing allowance is pay with no uniform to be worn, it will be treated as wage and contribution should be paid.
About travelling allowance/conveyance allowance etc, I have posted exhaustively in the past, please search those posts. Reimbursement of duty related travel expences is not wage. Fixed amount payment without any production of travel documents, tickets etc is wage.
Any cash payment regularly under the head Food allowance is wage, but free food, or occasional reimbursement of actual food expences for additional or Overtime work or while on tour etc is not wage.
Formerly Addl Commissioner ESIC
CEO Santhi Hospital,
Nowadays, as soon as u enter the wages,all these points will be looked after by the system itself.
all the best....
We are a mfg Co. & CTC break up provided by co is like this...1)Basic, 2)HRA, 3)Conveyance,4)Tel Allowance, 4)Spl Allowance, 5)P.F.-Employer Share,6)LTA or , 7)Medical or ESI, 8)Bonus
Could you pls confirm which part of above break up decide whether employee is applicable for ESI deduction ...
Your responsecwould help in clearing my concept...thnx & rgds
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