Hi All, In our organisation, for very few employees, we sometimes help on the form of loans which are interest free and the total amount is settled on monthly basis as a 1000 or 2000 or 500 rupees deduction.
Please advise if, for the above nature of the deduction, it is ok to deduct from either ON HAND salary or GROSS SALARY?

From India, Coimbatore
Dear friend,
Please note the following:
[(Gross salary) - (statutory deductions + other deductions like staff cafe, housing charges etc) - (loan amount)] = net salary.
The net salary is also called as "Take Home Salary".
A loan deduction can be done while processing the salary. However, please make sure that you have done proper documentation before disbursement of the loan. Secondly, please make sure that after all the deductions, take home salary does not go below 50% of the gross salary.
Dinesh Divekar

From India, Bangalore
Loan deduction to be approved by the Inspector of Factories. List of deduction like Fines, loan, co-operative society loan recovery have to be approved by Inspector of Factories.
From India, Madras

Loans, Salary advances etc could be deducted from the gross salary of employees. Net salary is, as our colleague perfectly defined as, Take hom salary only.
From India, Aizawl
You better deduct the loan amount from their salary, as it would easy to track the loan balances at any time. But ensure that their deduction not beyond 50% of their Gross Salary, if in case there is no society.

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