Whether any Statutory deduction (ESI/PF/Professional Tax) attracts Subsistence Allowance ?

Whether any Statutory deduction (ESI/PF/Professional Tax) attracts Subsistence Allowance ?
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If the employer forgives the employee upon the charge which caused his suspension, should the employer pay the remaining portion of his normal wages after adjusting subsistence allowance during the period?

Subsistence Allowance will attract ESI. In ESI Corporation Vs Popular Automobiles,the Supreme Court has said that subsistence is wages. However, subsistence allowance being a remuneration payable to an employee placed on suspension and as such not earned by him working in the company, the same shall not be considered for PF deduction. Profession tax being a tax on the earnings/ revenue which is not restricted only to salary income, any receipt should attract it. As such, subsistence allowance should attract profession tax.
Once the employer reinstates the employee with back wages, the employee should be paid salary as arrears of salary after adjusting the subsistence allowance already paid. At that time, PF shall be deducted.
If the employer reinstates the employee without back wages, then no salary needs to be paid. Whether back wages should be paid or not depends on the gravity of the charges and the decision of the disciplinary authority.

Kiran,
Even if the employer takes a lenient view due to the employee accepting the charges of misconduct or otherwise, the employer is entitled to treat the period of suspension as "punishment" and not to pay balance of wages for the period of suspension. However, a detailed written order will have to be passed in this regard.
- Shobhit Kumar Mittal
Industrial & Labour Law Advisor
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If the employer forgives the employee upon the charge which caused his suspension, should the employer pay the remaining portion of his normal wages after adjusting subsistence allowance during the period?

Let me make it clear that Reinstatement may take two forms,viz, reinstatement with back wages and reinstatement without back wages. In the former case, difference between actual wages considering the days for which the employee was placed under suspension as days worked and the subsistence allowance paid shall have to be paid. In the latter case, it is not to be paid.