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Dear All I need clarity regarding Gross salary(Salary Component) calculation for ESIC deduction.
if incentive is not a regular Income then ESIC will be deducted on Gross (Including Incentive) on regular basis or we have to exempt Incentive component for ESIC calculation... If there are any salary components which can be exempted from salary calculation.I come to know that washing allowance and Uniform allowance are exempted from ESIC calculation.. Request you to provide your input regarding the same and any document related the same will be very helpful to me.
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As per the decision of the Supreme Court delivered on 8.3.2000 in the case of M/s.Whirlpool India Ltd. Vs. ESIC in civil appeal No.1903 of 2000, additional remuneration to become wages has to be paid at intervals not exceeding two months as distinguished from being payable. Thus, there has to be actual payment and the payment of production incentive does not fall either under the 1st part or last part of the definition of the term wages as defined in Sec.2(22) of the Act, hence no contribution is payable on the incentive bonus, provided the periodicity of payment is more than 2 months.
(Earlier instructions were issued by this office vide Memo No.T-11/13/53/19-84-Ins.IV dt. 19.9.84, Memo No.Ins.III-2(2)/2/69 dt,. 26.12.73, Memo No.T-11/13/54/18/82-Ins.IV dt. 14.7.82 & Memo No.D/Ins.5(5)/68 dt. 18.9.88.)
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