Saswatabanerjee
Partner - Risk Management
+2 Others

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Dear All,
Pls answer to my questionnaries.....
I. Gratuity:
1. Is that mandatory for a company to provide a gratuity? If yes, should we need to register in a Govt. office like an employer PF a/c?
2. Should the employee need to contribute from his/her Gross salary for gratuity?
3. If Yes, On what basis, we need to deduct the amount from their salary?
II. ESI:
1. If basic is >6500, is it mandatory to consider only the max. PF Contribution Rs.780/- else we can calculate the basic*12% for PF? Is it a rules laid by Govt.?
2. Suppose if we can exceed that limit, is it taxable?
3. Is it compulsion/rules for an employer to split 12% into 8.33% for Pension Fund & 3.67% for Provident Fund?
4. Who are all the employers should split it?
Thanks and Regards,
R.S.Suhasini

From India, Hyderabad
Hi Suhasini,
Gratuity is mandatory. Gratuity is applicable as per "Payment of Gratuity Act".
Gratuity can be part of CTC for calculation purpose only.
No deduction from salary.
ESI applicable up to Rs 15,000/- gross salary
PF limit has increased from Rs 6500/- to Rs 15000/-. PF rules are laid by Government
PF is not taxable
If Employer share is more than 12% of basic+DA then additional PF share by employer is taxable.
it is rules that employer PF share to split 12% into 8.33% for Pension Fund & 3.67% for Provident Fund
All employer has to split the PF share in their return

From India, Delhi
These have been repeatedly discussed on the forum in details Have you bothered to search the earlier posts ?
From India, Mumbai
RS Suhasini
Gratuity is mandatory if an employee completes five years of continuous service in a company.
Employee need not contribute anything for gratuity. It is liability to employer only.
There is no need to do any registration for gratuity.
But it needs to be valued by a certified valuer and the certified value is to be provided in the books of accounts as per accounting standards.
Be clear in your query. You have given the heading as ESI but your queries are related to PF.
Any how,
PF is being administered under Provident Fund and Miscellaneous Provisions Act of Central Government.
All employers what ever be their status are required split their contribution into two as EPF and FPF.
An employee can contribute more than 12% but it is enough if employer contributes 12%.
PF is not taxable as it is only a deduction from one's salary.

From India, Chennai
Dear R.S, The company has to pay the Gratuity when the employee is leaving the job after putting minimum of 5 years of continious service. The employee need not to contribute anything. But the employer has take the current basic pay + dearness allowance (without other allowance ) for calculation x no of years x 15 /26. But the max. limit is Rs.10.00 lacs per employee.
Secondly, The limit for ESI has been increased upto RS.15000/-. The employer to has pay from their constribution @ 12% and it will be taken as you mentioned. While preparing the challan, this should be noted. No specific stipulation for employers.: b.sekar As I am not tag the writings here, I didn't do the same.

From India, Chennai
Thank you for all the replies. It would be great, if you can reply to my other queries.
I have gone through many of the forum discussions, but those details was not exactly as needed for me.
If a company mentions medical allowance max. of 800/Month in a pay slip, can they deduct ESI also?
How can we get updated about these PF, ESI, Gratuity, IT, Professional Tax and other details whenever the Govt. make changes in their limitations.... ex: for PF consideration, basic salary limitation is 15,000 whereas previously it was 6500.
On what basis, the professional tax has to be calculated and deducted from salary
Provide me the details about Superannuation

From India, Hyderabad
@Chith,
You have provided the formula of gratuity to calculate the final amount to be disbursed for the candidate after s/he relieves from the company. But i need the formula of gratuity to calculate that how much the company spends on monthly basis? to show in the salary structure while offering for the candidate.
It would be very useful for me if you can provide it.
Thanks in advance....

From India, Hyderabad
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