Guidance on Legal Compliances for New Business Operations in Mumbai
Currently, I am working with a fundraising company, and this company is starting its new business operations in Mumbai. We have begun the process of hiring as well (it is not a manufacturing unit), and here we may need 20-25 employees. The directors of this company have instructed me to take care of all legal compliances, right from getting the company registered for ESIC & PF to handling all employee-related forms for these two acts. Considering this requirement, I seek your guidance on the following questions:
1. What are the eligibility criteria for PF & ESIC from the viewpoint of employees and employers?
2. How can we get the company registered under PF & ESIC?
3. What type of deductions are required from the employee and employer sides? What forms do I need to fill or have filled by employees and submit on a monthly basis to the respective department?
4. After deductions, how do we pay the deducted amount to the respective department or government? For example, do I have to personally submit that amount in their office?
(Note: The employees we are hiring have a salary bracket between 12k to 50k per month)
I am sharing with you some information that I have collected for my understanding. Kindly correct me if I am wrong anywhere.
PF Applicability for the Company
It is extended area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons.
Coverage of Employees
Drawing a salary up to Rs. 15,000 per month.
Deduction
Employees 12% & employers 13.61%
ESIC Applicability
It is extended area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons up to Rs. 15,000.
Coverage of Employees
Drawing a salary up to Rs. 15,000 per month.
Deduction
Employer's 4.75% on gross.
Employee's 1.75% on gross.
Regards,
Aparna C.
From India, Mumbai
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1Currently, I am working with a fundraising company, and this company is starting its new business operations in Mumbai. We have begun the process of hiring as well (it is not a manufacturing unit), and here we may need 20-25 employees. The directors of this company have instructed me to take care of all legal compliances, right from getting the company registered for ESIC & PF to handling all employee-related forms for these two acts. Considering this requirement, I seek your guidance on the following questions:
1. What are the eligibility criteria for PF & ESIC from the viewpoint of employees and employers?
2. How can we get the company registered under PF & ESIC?
3. What type of deductions are required from the employee and employer sides? What forms do I need to fill or have filled by employees and submit on a monthly basis to the respective department?
4. After deductions, how do we pay the deducted amount to the respective department or government? For example, do I have to personally submit that amount in their office?
(Note: The employees we are hiring have a salary bracket between 12k to 50k per month)
I am sharing with you some information that I have collected for my understanding. Kindly correct me if I am wrong anywhere.
PF Applicability for the Company
It is extended area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons.
Coverage of Employees
Drawing a salary up to Rs. 15,000 per month.
Deduction
Employees 12% & employers 13.61%
ESIC Applicability
It is extended area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons up to Rs. 15,000.
Coverage of Employees
Drawing a salary up to Rs. 15,000 per month.
Deduction
Employer's 4.75% on gross.
Employee's 1.75% on gross.
Regards,
Aparna C.
From India, Mumbai
Acknowledge(0)Amend(0)
Registration
You can apply for PF registration online through the EPF portal.
PF Deduction
You should deduct on Basic + DA but not on the gross. The ceiling limit is Rs. 15,000/- (Basic + DA). If your salary structure is CTC, both contributions (employee, employer) will be deducted from the employee. Otherwise, the employer contribution will be borne by the employer.
Monthly deductions should be paid through the online portal, and the acknowledgment should be filed for future reference. Monthly documents need to be maintained.
ESIC
You can apply for ESIC registration online through the ESIC portal.
ESI Deduction
ESI deduction will be done on the gross. The ceiling limit is Rs. 15,000/- as you mentioned.
After registration, you should enroll your employees, generate IP forms, and issue the same to your employees. Ask them to take a photo at the ESI office where it is available in your locality for the purpose of a Pechan card.
You can make payments of monthly challans by logging into your online portal.
PT (Professional Tax) is subject to your state norms.
Regards,
Aparna C.
From India, Hyderabad
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You can apply for PF registration online through the EPF portal.
PF Deduction
You should deduct on Basic + DA but not on the gross. The ceiling limit is Rs. 15,000/- (Basic + DA). If your salary structure is CTC, both contributions (employee, employer) will be deducted from the employee. Otherwise, the employer contribution will be borne by the employer.
Monthly deductions should be paid through the online portal, and the acknowledgment should be filed for future reference. Monthly documents need to be maintained.
ESIC
You can apply for ESIC registration online through the ESIC portal.
ESI Deduction
ESI deduction will be done on the gross. The ceiling limit is Rs. 15,000/- as you mentioned.
After registration, you should enroll your employees, generate IP forms, and issue the same to your employees. Ask them to take a photo at the ESI office where it is available in your locality for the purpose of a Pechan card.
You can make payments of monthly challans by logging into your online portal.
PT (Professional Tax) is subject to your state norms.
Regards,
Aparna C.
From India, Hyderabad
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