Is It Mandatory to Provide HRA and Conveyance Allowance for Compliance?

Is it mandatory to give HRA & Conv., from the compliance point of view?

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Compliance Considerations for HRA and Conveyance Allowance

It is important to consider whether providing House Rent Allowance (HRA) and Conveyance Allowance is mandatory from a compliance standpoint. These allowances may be subject to specific regulations or requirements depending on the jurisdiction and company policies. It is advisable to consult with HR experts or legal professionals to ensure that your practices align with relevant laws and regulations. Proper documentation and adherence to guidelines can help mitigate risks and ensure compliance with applicable standards.

It is not mandatory to give HRA and Conveyance for compliance purposes. However, the consolidated wages should be at least equal to the minimum wage.

Regards,

Dear Mukesh, can we bifurcate the minimum wage into Basic, HRA, Conv, etc., as per EPF Rule? Please advise with a case history.

Regards,
Harkishan Tanwer
Manager-HR & ADM
[Phone Number Removed For Privacy Reasons]

As per the provisions of the Employees' Provident Funds & Miscellaneous Provisions Act, 1952, the management can bifurcate the minimum wages into Basic, HRA, and Conveyance only; no other head is allowed. Furthermore, if we have not bifurcated the minimum wages of some employees/workers and the management has paid a consolidated amount, then the management cannot bifurcate the same. However, the management can bifurcate the minimum wages for employees who will join in the future.

Thank you.

Regards

It is not mandatory to give HRA & Conv. for compliance purposes, but the consolidated wages should be at least minimum wages. It is not mandatory from a compliance point of view, but it may be necessary for income tax benefit purposes.

Regards,
Anil Sharma

Could you please provide us with the criteria for the bifurcation of minimum wages into Basic, HRA, and Conveyance (percentage of Basic, HRA, and Conveyance Allowance) if the minimum wage is 3850/-?

Regards,
Manish Sharma

In Maharashtra, an establishment employing more than 50 employees has to pay a minimum of 5% as House Rent Allowance (HRA) of Basic + DA.

The minimum wage in Punjab is Rs. 3850/-. You have to keep the Basic at Rs. 2700/-.

HRA Rs. 850/- (the HRA should be approximately 25% to 40% of the basic salary)

Conveyance Rs. 300/- (the Conveyance should be approximately 10% to 20% of the basic salary)

Nothing specifies the percentage of bifurcation of minimum wages in any rule. However, we have to decide the same according to the parameters mentioned in the Income Tax Rules.