I wanted the experts' opinion in relation to a serious issue. For unavoidable reasons, we had to place one of our employee, under suspension and the enquiry committee has been set up to look into the charges. Pending enquiry report submission, we need to pay subsistence allowance to the suspended employee and as per organization policy, it is one-fourth of the pay.
Now, my query is related to the calculation of subsistence allowance:
1. Whether the subsistence allowance is to be taken as one-fourth of the total payable salary or one-fourth of the basic pay? What is the legal & correct way and what procedures are followed generally in companies, with respect to the afore-said calculation?
2. Whether TDS will be carried out for such an employee ? What if the one-fourth of total payable salary falls short of min. requirement for tax deduction?
3. If subsistence allowance is calculated as one-fourth of the basic pay, then other allowances like DA, HRA etc will be computed on the basis of 1/4 of Basic or will remain the same as earlier?
Also, in case of one-fourth of basic, if reduced basic is less than Rs. 6500, then the deduction of pf will be 12 % of 6500 (in our organization, for employees drawing more than Rs 6500 basic, we have pf = 12% of 6500) or
the pf will be computed as 12% of reduced basic?
Again, will the TDS be carried out in this case?
Looking forward to prompt response.
30th November 2009 From India, Delhi
Industrial Relations And Labour Laws
Hr & Administrative Manager
Hr-manager, Trainer, Writer
Hrm, Recruitment, Training And Development,
Hr ( Generalist)
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Ir, Er, Payroll, Recruitment,
Kalpana M Iyer
Discuss problems openly with your peers around the world without getting into company specifics. Access to years of such problem discussion data and business material is at your finger tips.
All resources created by our members are available to everyone at no cost.