Understanding ESIC Deductions: Should They Continue After a Salary Increase?

Hi there,

I have a query on the ESIC Act.

Case I - Mr. X's salary is Rs. 9500, which makes him eligible for ESIC. In October 2008, he gets a salary revision, and his new salary is Rs. 10,000. However, despite the increase in salary, the payroll department of the company continues the ESIC deduction from his salary. He realizes this only after 2 months. On questioning the HR, he is told that the ESIC amount will continue to be deducted until March 2009.

Q1. Is it correct that his ESIC deductions continue until March '09?
Q2. If not, will he get the recovery for the wrong deduction?

Request a detailed explanation.

Thanks in advance!

Salary up to ₹10,000, inclusive of all factors, is eligible for ESIC deduction. If the salary is up to ₹10,000 in April 2009, then ESI will be deducted until 30th September 2009, even if the employee receives an increment, and it will stop from 1st October 2009.

Anyways, don't worry too much, as ESI will revise the limit to ₹30,000, so there will be no escape route when that is implemented. 😁

Dear Friend,

Greetings!

From my point of view, the contribution period is as follows:

- 1st April to 30th Sept.
- 1st January of the following year to 30th June.
- 1st Oct. to 31st March
- 1st July to 31st December of the year following.

Until 31st March, he is eligible for ESI, and the amount will be deducted from the employee's salary.

To my mind, you can stop contributing to ESIC at any time. The only thing is, you may not be able to claim benefits in the corresponding benefit period. Each benefit has some conditions attached.

Jagdish Patel
PTRC