Salary payment to the Employee who doesnt have his own bank account but gives family members account - CiteHR
Insolvency N Gst Professional
Compliance Manager

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I am currently working in a Start-up where I have employees who doesnt have their own bank account as these guys have just completed their graduation. Now my question is they are giving me their siblings account which is not even a joint account. Is it right or ethical to transfer salary into their siblings account???
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Hello Anonymous,
Generally it is not safer to pay salary to employees in an account which is not owned / operated by them. It may attract problems where your employees cannot monitor the credit & debit status easily.
You can have a tie-up with your Bank where you maintain your Current Account. Nowadays there are simplified savings accounts offered by all nationalized banks under the name "BASIC SAVINGS BANK DEPOSIT ACCOUNT ( BSBD Account )". Though it requires basic KYC documents such as Aadhaar Number you can advise your employees (who are newly graduated ) to go for such accounts. Or else you can ask your Banker to open salary accounts for your employees.
You can always ensure that the employees open their bank account in the nearest bank at the soonest. Also give cheques drawn in the employees name so as to avoid issues with the tax and audit department at any given time apart from the other Government regulatory bodies. It is so very easy to open an account and moreover the Govt is also pushing all the people in the country to have a bank account not sure what is stopping a recent graduate to open an account and also go for PAN card. Once you start giving them the salary in the name of the employee they will be compelled to open an account which hardly takes a week at the most with all the KYC done as per rules. Start up or otherwise try to stay in line with the rules.
Thanks and Regards
This situation is not acceptable.
Employee needs to give his individual bank a/c for deposit of salary.
Starting from tax implications to legal issues,many problems can come up with this short cut of sending bank payments to some other a/c.
You should not give salary cheques in family members or in any persons name.
May cause problems -- TDS is one of them, claim by others that they are your employees, claim by the employee that he has not be paid etc.
Give cheque in his name. Rest is not your problem--yes you may help them in opening account .
Col.Suresh Rathi
This is noway justifid to send wages to others account. You ask the employee to open an account or pay to him by account payee cheque.
How you will operate his EPF account and generation of UAN unless until one have one valid bank account.
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