Hi, One of our employee wants his salary not on monthly basis and he wants it collectively after two years. Let me know any Income Tax and legal implication as far as Company is concerned.
Thanks
Saby
From India, Bengaluru
Thanks
Saby
From India, Bengaluru
Dear Saby,
Shops and Commercial Establishment Act and Factories Act, both mandate disbursal of monthly wages and salaries by 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 then it will impact remittance of PF, ESI and other statutory payments as applicable.
Company has provision of keep unpaid wages but this is in case of employees who abandon their employment. Even unpaid wages also cannot be kept with the company forever, but these are required to be deposited in Labour Welfare Fund of the respective state. Therefore, when the employee has complete attendance, his salary cannot be shows as unpaid wages.
Against this backdrop, employee may be advised to open an Recurring Deposit (RD) account in the back from which he gets the salary and accumulate the earning with interest. How to accumulate one's money is employee's personal decision and company cannot involve in the personal decisions. For further queries, feel free to contact me.
Thanks,
Dinesh Divekar
From India, Bangalore
7884Shops and Commercial Establishment Act and Factories Act, both mandate disbursal of monthly wages and salaries by 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 then it will impact remittance of PF, ESI and other statutory payments as applicable.
Company has provision of keep unpaid wages but this is in case of employees who abandon their employment. Even unpaid wages also cannot be kept with the company forever, but these are required to be deposited in Labour Welfare Fund of the respective state. Therefore, when the employee has complete attendance, his salary cannot be shows as unpaid wages.
Against this backdrop, employee may be advised to open an Recurring Deposit (RD) account in the back from which he gets the salary and accumulate the earning with interest. How to accumulate one's money is employee's personal decision and company cannot involve in the personal decisions. For further queries, feel free to contact me.
Thanks,
Dinesh Divekar
From India, Bangalore
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