Starting a New Company in India: Is PF Mandatory and How to Structure Salaries?

Hi, We have just started a new company in Mysore, India. As we have just started the company, we will be disbursing the salaries to all our 8 employees. I would like to know:

1. As the complete salary will be paid by cash, we won't be deducting any component including PF, is this going to create a problem?
2. As ours is a small organization currently, is it mandatory to open a PF account for all the employees? We had already informed the employees that the salaries will be paid by cash, without any deductions towards PF, and they are fine with it.
3. If opening the PF account for each employee is not mandatory for a small organization like ours, can someone help with the salary structure for a yearly CTC of Rs. 150,000 [salary of Rs. 12,500 per month].
4. If opening the PF account for each employee is mandatory, can you please help with the salary structure for a yearly CTC of Rs. 150,000 [salary of Rs. 12,500 per month].
5. Also, what are the components that we can add to help the employee save on tax for a CTC of Rs. 450,000 [salary of Rs. 37,500 per month], in case we recruit a senior or a manager?

You have added many queries, but how can you miss out on your name? Without knowing the nature of the business, it is difficult to respond to some queries.

As you have only 8 employees, there is no need for enrollment in ESI & EPF immediately. Once you reach 10 employees, then you should enroll for ESI. If you reach 20 employees, enrollment with EPF is also mandatory. However, if you are willing to register with EPF, you can do so as voluntary registration. PT registration is mandatory, and PT must be deducted and remitted for all employees who are receiving a gross salary of 15,000 and above.

Regards