Small Company Dilemma: Can We Offer PF, ESIC, and PTax with Just 7 Employees?

Hello Everybody, I am working in a small company, and our resource strength is 7. Can we take PF, ESIC, and PTax? If yes, then what is the procedure? If no, what is the problem? Kindly help me.

Regards, Smruti

Dear Smruti,

You have not specified the nature of your company. Also, your location is not mentioned. For a manufacturing company, the criteria for PF and ESI are as follows:
i) For operations with power (i.e., manufacturing), a minimum of 10 employees should exist.
ii) For operations without power, a minimum of 20 employees should exist.

However, the PF act does not allow voluntary membership. You can contact the PF office near your area.

Professional Tax (PT) is applicable in selected states, including Maharashtra. I will gather more information on PT and provide an update soon.

Regards,
Vaishalee

Hello Everyone,

I have started a Consulting Firm recently in Chennai. Now, I have also begun temp staffing and leasing business. Currently, I have 4 employees. Should I proceed with ESI, PF, and PT registration? If yes, please suggest how to proceed and what procedures and relevant documents need to be submitted.

Awaiting your response.

Regards,
Eswar

The concept of 20 for factories running without power no longer exists now. It is 10 for factories and 20 for establishments coming under the Shops Act.

In the instant case, only Profession Tax is applicable. If you desire to go for ESI registration, you should have at least 20 employees (if you come under an establishment) or 10 employees (in case yours is a factory). You can include all your casual, daily rated, and security personnel to make the employment strength 10/20, as the case may be. Once you get registration, you can show them as left service. By doing so, you will be covered for the rest of the time.

For voluntary coverage of PF (which is given to establishments employing less than 20 employees), the approving authority is the Central PF Commissionerate. The process would be time-consuming. At the same time, if you work out the list of employees to 20 as explained in the case of ESI, you will get it as per statute from the local PF Office itself. Once registration is obtained, you can show the casuals or fake names as left in the next month's return (form 10).

Before going for the registration, please think twice!

Regards,

Madhu.T.K

Dear Smruthi,

Kindly update the number of employees in your company. Professional Tax is mandatory for each and every company.

Procedure:

1) Approach your location's Professional Tax office and fill the required forms (Process varies between State to state for PT).

2) Based on the title of the company (Limited, Proprietorship, or Partnership), required documents have to be submitted.

3) Address proof of the business location, address, and ID proof of Directors or partners have to be produced. Only after registration should you deduct PT.

For ESI & PF, kindly inform me of the organization size so we can provide further details. Any queries are always welcome.

Regards

Your company will not come under the ESI and EPF Act. However, PT is applicable.

Regards

Only PT is applicable as per the act. If an employee and employer want to deduct PF, then PF is also applicable but not compulsory.

Regards,
Vneet Deshmukh.

"EVERYTHING IS POSSIBLE ONLY IF YOU CAN DO IT"

Dear Charanjeet Singh Ji,

House rent allowance and dearness allowance are taxable income. Actual traveling allowance and daily allowance during official tours are not taxable up to certain limits. Medical allowance is also not taxable if the employee has medical bills, cash memos, etc., for the amount received and spent by him/her. If there is no expenditure on medical grounds for self and family members, the allowance becomes taxable.

I have not addressed the first part of your query regarding the ceiling on HRA, etc. Please provide more details. Thanks and regards,

Hey, can anybody provide knowledge about professional tax? Who is liable to deduct it, from whom are they liable to deduct, and where do the companies that deduct it have to deposit it?

Thank you.

Dear Harshal Ji,

It depends on which state you are situated in. Professional tax is a state government tax. First, you have to register your firm with the Professional Tax authority. In Maharashtra state, once you get the registration number, you have to deposit the PT in State Bank of India. The challans issued by SBI are valid receipts for the payment of PT to the state government. Please provide the location of your office.

Regards,