Am I Eligible for a Refund on ESI Deductions After My Salary Increase?

Hi Everyone, :)

As far as I know, anyone with a salary above 10000/- is not applicable for ESI Deduction. My salary until March 09 was 9000/-. The company declared an increment of Rs. 1500/- in July with effect from April 09. Therefore, my salary from April 09 will be 10500/-. Initially, ESI deductions were made based on my April, May, & June salaries at 9000. Subsequently, the company provided us with the arrears.

I have a question regarding whether I am eligible for a refund of the ESI deductions made by the company for the 3 months (April, May & June 09). If yes, kindly inform me of the rule under which I am entitled to the refund.

Regards,
Gaurai123

Dear [Name],

Legally, you cannot receive any refund, and the deduction should continue until September 2009.

Regards,
JS Malik

Dear Mr. Malik,

This is Karthick from Bangalore working as an Admin Executive. I am working as a contract employee. I was paid about 9500 per month up to July 09, and I had an increment of 2500 Rs w.e.f Aug 09. I also have the same problem of deducting ESI, and I saw your reply.

I just want to know why they are deducting till September.

Regards, Karthick C.

Dear Mr. Malik,

It is law that the ESI cycle runs from April to September and October to March. Contributions cannot be stopped in between and should be halted at the end of the cycle.

Regards,
Js Malik

Once any amount is paid towards the Govt. A/c, it is not easy to get a refund. A similar case happened to me around 9 years back. Since it was not possible to get a refund, I asked the then HR head for an adjustment in the next month. Accordingly, before depositing the amount with the ESI Dept., the amount was adjusted and refunded to me.

As per the ESI cycle, you cannot stop contributions in between; it is to be stopped at the end of the cycle. So, in my view, you will not get any refund.

If one's increment is effected in between the cycle and the new salary exceeds the limit, then he has to contribute towards ESI up to the end of the cycle. But one is not liable to pay if the increment takes effect from the beginning of the cycle.

For example, in the case of a mistake by the HR Dept/Accounts Dept where ESI is deducted from an employee in the month of April, it does not mean that the employee has to contribute to ESI up to the end of the cycle. Therefore, there is no issue in providing a refund while making adjustments in the following month.

Hi,

I am Sandeep, working as an administrator-HR in a Pvt. Ltd. company. My company and my employees are not utilizing the benefits of ESI hospital. I want to know if we can refund the money we paid to the ESI department.

Thank you