Re: Regarding ESI Contribution

Would like to get clarification that,an employee of salary 15k who has subscribed for ESI only for 2 months, say Apr,May followed by salary hike more than 15k due to promotion,is he compulsorily to contribute for the six month period(Apr-Sept).Is it correct to deduct ESI contribution on 15k till Sept? Pl suggest

Since the salary revision has taken place in May only, he has to contribute till Sept, the end of contribution period. The contribution should be on the revised salary and not on Rs 15000.
Regards,
Madhu.T.K

Dear Madhu,
Thank you for your clarification.The salary of the employee effective from April is 15k.And revised salary hike effective from Jun is 16k.What my doubt is whether the ESI deduction from the month of Jun till Sept to be made on 15k or not? or can we discontinue ESI deduction from Jun? Pl clarify.

No you Can't Discontinue the Contribution for Revised Period If you Continuing Job Once Contribute in Apr you Should Pay The Esi Dedution at the End of the Half Yearly period(Apr to Sept & Oct to Mar) for the maximum of 15000/ Only.

Yes It IS NECESSARY TO DEDUCT ESIC ON INCREASED WAGES UPTO SEPTEMBER ( LAST MONTH OF CONTRIBUTION PERIOD )

According to the ESI act we cannot stop contribution until completion of contribution period even though salary has crossed ESI ceiling. But it does not confirm the deduction should be either on 15000 or on the revised salary.
Case of employee drawing salary of 15000.00 and earning Overtime of Rs. 5000.00 Total ESI will be deducted on 20000.00. That is compulsory aspect. But deduction of ESI on revised salary is not justified according to the ceiling.
The Statement "contribution cannot stop until completion of contribution period" does not reflect deduction of ESI on actual wages or ESI ceiling.
Please give your valuable comments

The ESI contribution should continue till September and should be deducted on Rs 15,000/- and not on Rs. 20,000/-..

Thanks Mr. Gadre for reply. But still the word "should" is doubtful. I wish to know the facts, working experiences and something more on it. Please go for legal opinion / judgements.

Dear All
At present when Esic on line Return submitted every month . so you can stop Esic contribution from incremented month.
Sunil kumar

There exists different treatment with regard to qualifying salary for the purpose of payment of contribution and some say that it should be on increased salary without any limit but others say that it can be restricted to Rs 15000. In a similar issue the Inspector who verified my client's case put a note that it should be on the revised amount. But one thing is clear that if the increase is due to overtime, the entire amount will qualify for contribution since OT will certainly attract ESI.
In any case, it should be contributed till the end of the contribution period. It will be helpful if Sunil Kumar could share any notification to the effect that since online is introduced we can stop payment of contribution from the month in which salary revision took place.
Regards,
Madhu.T.K