Statutory Deductions Exemptions Perquisites Payroll

I Have Attached Statutory Deductions Exemptions Perquisites Payroll

Rules for Statutory Deductions, Exemptions on Allowances & Perquisites

Statutory Deductions:

1. EPF

12% on Basic + Wages + Stipend + Arrears

Condition:        If Basic salary at the Date of joining is above 6,500 then

It is optional to Employee for PF Deduction. Else

If Basic salary at the Date of joining is below 6,500 then

PF Deduction is compulsory

Companies Contribution: 12% on Basic + Wages + Stipend + Arrears

2. ESIC

1.75% on Gross Salary.

Condition:        If Gross Salary is below 10,000 then

ESIC is applicable and is deducted. Else

If Gross Salary is above 10,000 then

ESIC is not applicable and will not be deducted. Companies Contribution: 4.75% on Gross Salary.

3. MLWF

To Deduct MLWF @ Rs. 12 in June, and December for all the employees of

Maharashtra falling under the following grades: (C1 – C5, M1 – M5, S1 – S5, P1 – P#).

4. Profession Tax

To deduct Profession Tax as per the Profession Tax slab. Given below are the

Profession Tax slabs for the employees of Maharashtra

Profession Tax Slab For Maharashtra

                              Gross Salary          Profession Tax Deduction

0-2500                              0

2501-3500                             60

3501-5000                            120

5001-10000                          175

10001-and above                  200[300 Feb]

Exemption on Allowances:

1. HRA Exemption

HRA allowance received by the employee

Or

Actual rent paid – (10% of Basic + D.A.) Or

50% of (Basic + D.A.) incase the location is (Mumbai, Kolkata, Chennai, Delhi)

or 40% of (Basic + D.A.) incase of other cities.

Or

Which ever is less of the above three.

2. Conveyance Exemption

Maximum Exempted u/s 10 upto Rs.9600 p.a.

(i.e. @ Rs. 800 per month when paid along with the salary)

3. Medical Exemption

Maximum Exempted u/s 10 upto Rs.15000 p.a. based on the bills produced by the employee

(i.e. @ Rs. 1250 per month when paid along with the salary)

4. Education Exemption:

As per the slab mentioned below:

                     Child             Education Exempt           Hostel Expenses

0                                 0                                  0

1                             100                              300

2                            200                              600

Maximum Exempted u/s 10 upto Rs.2400 p.a. based on no of dependent children’s declared by the employee

(i.e. @ Rs. 200 per month when paid along with the salary)

5. Telephone Exemption:

Maximum Exempted u/s 10 upto Rs.18000 p.a. based on the bills produced by the employee

(i.e. @ Rs. 1500 per month when paid along with the salary)

6. Petrol and Vehicle Maintenance Exemption

For Car           : Rs. 1200 p.m. * 12 months  =          14,400

For Driver        : Rs. 600 p.m. * 12 months    =          7,200

Perquisites:

1. Company Accommodation / Furniture

15% of Basic + Bonus + Entertainment Allowance

+

10% of Cost of Furniture

–

Rent of accommodation paid by the company

= Value of Perquisite

2. Company Car / Driver

For Car           : Rs. 1200 p.m. * 12 months  =          14,400

For Driver        : Rs. 600 p.m. * 12 months    =          7,200

Exemption on Investments :

1. 80 C

Upto 1,00,000 under heads like PPF, LIC Premium, PF, Housing Loan Principal, NSC, ELSS, etc.

2. 80 D

Medical Insurance such as Mediclaim Premium is exempt upto 15,000 per year for self, spouse, and dependant children and additional Rs.15,000 is exempt towards premium for parents and a further Rs.5,000 if the parents are above the age of 65 years.

3. 80 E

Interest on Loan taken for higher education is completely allowed as a deduction.

4. And Other Sections

Like 80CCC, 80DD, Housing Loan Interest, etc.

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