Hi all,
In our organization, we sometimes provide interest-free loans to a few employees. The total amount is settled on a monthly basis through deductions of 1000, 2000, or 500 rupees.
Please advise if it is acceptable to deduct the above-mentioned amounts from either the employee's on-hand salary or gross salary.
Thank you.
From India, Coimbatore
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In our organization, we sometimes provide interest-free loans to a few employees. The total amount is settled on a monthly basis through deductions of 1000, 2000, or 500 rupees.
Please advise if it is acceptable to deduct the above-mentioned amounts from either the employee's on-hand salary or gross salary.
Thank you.
From India, Coimbatore
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Dear friend,
Please note the following:
(Gross salary) - (statutory deductions + other deductions like staff cafe, housing charges, etc.) - (loan amount) = net salary. The net salary is also called "Take Home Salary."
A loan deduction can be done while processing the salary. However, please make sure that you have completed proper documentation before the loan disbursement. Secondly, ensure that after all deductions, the take-home salary does not go below 50% of the gross salary.
Thanks,
Dinesh Divekar
From India, Bangalore
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8072Please note the following:
(Gross salary) - (statutory deductions + other deductions like staff cafe, housing charges, etc.) - (loan amount) = net salary. The net salary is also called "Take Home Salary."
A loan deduction can be done while processing the salary. However, please make sure that you have completed proper documentation before the loan disbursement. Secondly, ensure that after all deductions, the take-home salary does not go below 50% of the gross salary.
Thanks,
Dinesh Divekar
From India, Bangalore
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Loan deduction to be approved by the Inspector of Factories. List of deduction like Fines, loan, co-operative society loan recovery have to be approved by Inspector of Factories.
From India, Madras
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From India, Madras
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Loans, Salary advances etc could be deducted from the gross salary of employees. Net salary is, as our colleague perfectly defined as, Take hom salary only.
From India, Aizawl
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From India, Aizawl
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Loan Form.doc
Amortisation Loan Chart.xls
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(Fact Checked)-[The information provided is mostly correct regarding loan deductions and take-home salary calculation. Just a minor point to mention is that there is no specific legal requirement for the take-home salary not to fall below 50% of the gross salary. However, ensuring that deductions are reasonable and documented is crucial.] (1 Acknowledge point)