Hi,
One of our employees wants his salary not on a monthly basis; he prefers to receive it collectively after two years. Please let me know about any income tax and legal implications as far as the company is concerned.
Thanks,
Saby
From India, Bengaluru
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One of our employees wants his salary not on a monthly basis; he prefers to receive it collectively after two years. Please let me know about any income tax and legal implications as far as the company is concerned.
Thanks,
Saby
From India, Bengaluru
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Dear Saby, Shops and Commercial Establishment Act and Factories Act both mandate the disbursal of monthly wages and salaries by the 7th or 10th of the following month. The date depends on the number of employees employed by the company. For a particular employee, a salary cannot be put on hold. If the salary disbursal action is not complete, it will impact the remittance of PF, ESI, and other statutory payments as applicable.
The company has provisions to keep unpaid wages, but this is in cases of employees who abandon their employment. Even unpaid wages cannot be kept with the company forever; they are required to be deposited in the Labour Welfare Fund of the respective state. Therefore, when the employee has complete attendance, his salary cannot be shown as unpaid wages.
Against this backdrop, the employee may be advised to open a Recurring Deposit (RD) account in the bank from which he receives the salary and accumulate the earnings with interest. How to accumulate one's money is the employee's personal decision, and the company cannot be involved in personal decisions. For further queries, feel free to contact me.
Thanks,
Dinesh Divekar
From India, Bangalore
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8072The company has provisions to keep unpaid wages, but this is in cases of employees who abandon their employment. Even unpaid wages cannot be kept with the company forever; they are required to be deposited in the Labour Welfare Fund of the respective state. Therefore, when the employee has complete attendance, his salary cannot be shown as unpaid wages.
Against this backdrop, the employee may be advised to open a Recurring Deposit (RD) account in the bank from which he receives the salary and accumulate the earnings with interest. How to accumulate one's money is the employee's personal decision, and the company cannot be involved in personal decisions. For further queries, feel free to contact me.
Thanks,
Dinesh Divekar
From India, Bangalore
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SALARY CALCULATOR & INCOME TAX.zip
Income tax declaration & Salary structre 2012-13.xls