Madhu.T.K
Industrial Relations And Labour Laws
Bijay_majumdar
Freelancer In Hr &indirect Taxes For

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Hi,
I wanted to know the following important queries:
1. Is a Proprietorship company or a Pvt lt. company eligible to have the regular CTC structure?
2. I case the company is not registered under labour laws then the how will the salary structure be?
3. Is deduction of TDS or PF compulsory if the company goes for the salary structure?
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What do you mean by a salary structure? Salary structure is nothing but a system which is common for all the employees in the organisation with regard to fixing and revision of remuneration. It is for the convenience that we adopt a structure and from the point of view of law what is important is whether the employees get the bare minimum wages fixed by the government or not. You can have a consolidated salary based on the skills and experience. Law does not prohibit you from such salary pattern so long as you are paying at par or above the minimum wages.
The CTC is different from salary. In CTC the additional sum payable to an employee by statute or by agreement which are cost to the employer like Provident Fund, ESI, Medical Insurance, Bonus, Commission, Variable Incentives etc will also be added to the salary.
There is no difference between a proprietorship concern and a Pvt Ltd company with regard to application of labour Laws. here what is important is the number of workers. Certain laws will be applicable to establishments employing 100 employees only, whereas certain other laws will be applicable to establishments employing even 10 employees. Similarly, coverage of certain laws will depend upon the salary of the employees.
TDS also depends upon the salary per annum of each employee. Since certain elements of salary, HRA, medical reimbursements, travel allowance etc, will have direct impact on the amount of tax liability of the employees, employers often look for a salary structure which is beneficial to the employees.
Dear Ankita N,
1. Is a Proprietorship company or a Pvt lt. company eligible to have the regular CTC structure? Yes
2. The salary fixation & its structure of a company does not fall under labour laws but for any violation the company can be prosecuted under law. The comapny either have to take registration under the Shops & commercial Establishment act of the state, if the toal no of engaement is 10 or more. managementthen the how will the salary structure be?
3. The deduction of TDS is must but PF is applicable if total employee in your company is 20 or more.
All the types of companies are required to follow labour laws.
As regards to salary struture or ctc.,The structure should be such that it covers all the emoluments that are manatory by law and at least equal to and above the spcified min limits of wages and remittences like epf,esic,Mlwf bonus,gratuity,leave with wages etc.
Further it is also important to follow the conditions of services specified by the law.
Tds deductions are also applicable under income tax law ,while Professional tax deduction is also applied and deducted from salary.
CTC there fore includes all such emolumets that amounts towards cost to company.And Salary is all such amounts that is earned by employees by entitlement plus the defered benefits that is deducted from the salary as contribution towards statutory remitences.Thanks to Madhu TK for explaining it so well.
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