Dear friend,
I am also of the opinion that deduction of certain percentage from salary and keeping aside towards bonus to be paid after 3-4 years of service, is not right. As conveyed by M/s Rajan Associates, only certain deductions are permissible under the law and we cannot do so as per your current practice.
No organization wants people to quit. There are different retaining strategy being followed by different organizations. But those strageties must be in accordance with the law.
Please see attached a policy that we developed for retaining employees in our organization. Probably you may think on these lines too. You can fine-tune the same to suit your organization.
V. Balaji
From India, Madras
100I am also of the opinion that deduction of certain percentage from salary and keeping aside towards bonus to be paid after 3-4 years of service, is not right. As conveyed by M/s Rajan Associates, only certain deductions are permissible under the law and we cannot do so as per your current practice.
No organization wants people to quit. There are different retaining strategy being followed by different organizations. But those strageties must be in accordance with the law.
Please see attached a policy that we developed for retaining employees in our organization. Probably you may think on these lines too. You can fine-tune the same to suit your organization.
V. Balaji
From India, Madras
Dear HR Fraternity,
I go with Mr.Shish Ram Uniyal's suggestion. In North Chennai in one good Company, they keep certain amount as Retention amount for certain period (years) (minimum & maximum 3 ~ 5 years respectively, is good as for my knowledge is concerned) and this is issued alongwith the Confirmation Order.
Once the employee completes the prescribed period, immediately after completion of the period, he/she is being issued with the retention amount without any delay.
It is not illegal. It should not be deducted from the salary of the employee. It should be exclusively given as Retention Bonus (based on his/her performance it should be issued). It can be calculated for Total CTC also.
K. Gopalakrishnan (Gopi)
Sriperumbudur
90940 16863
From India, Bangalore
I go with Mr.Shish Ram Uniyal's suggestion. In North Chennai in one good Company, they keep certain amount as Retention amount for certain period (years) (minimum & maximum 3 ~ 5 years respectively, is good as for my knowledge is concerned) and this is issued alongwith the Confirmation Order.
Once the employee completes the prescribed period, immediately after completion of the period, he/she is being issued with the retention amount without any delay.
It is not illegal. It should not be deducted from the salary of the employee. It should be exclusively given as Retention Bonus (based on his/her performance it should be issued). It can be calculated for Total CTC also.
K. Gopalakrishnan (Gopi)
Sriperumbudur
90940 16863
From India, Bangalore
I am in total agreement with Mr. Uniyal. Holding on to original documents, retaining part of the salary for 4 years etc.. are very poor HR strategies.
Instead the organization should focus on creating a work environment which would promote employee retention and reduce attrition.
Think of best Employee Retention measures that would best suit your organization and implement them.
Best Wishes,
Vasant Nair
From India, Mumbai
Instead the organization should focus on creating a work environment which would promote employee retention and reduce attrition.
Think of best Employee Retention measures that would best suit your organization and implement them.
Best Wishes,
Vasant Nair
From India, Mumbai
As per Section 43B of the Income Tax Act,
Any bonus or commission to employees, during the relevant assessment year, are allowed to the employer only if the payment made before the due date of filling return of income.
Then keeping in mind the above legal provision, if the employer have made for the bonus or commission will be payable on or before 30/sept of the suceeding FY, otherwise it will be disallowed to them.
Regards,
Sonu gupta
From India, Delhi
Any bonus or commission to employees, during the relevant assessment year, are allowed to the employer only if the payment made before the due date of filling return of income.
Then keeping in mind the above legal provision, if the employer have made for the bonus or commission will be payable on or before 30/sept of the suceeding FY, otherwise it will be disallowed to them.
Regards,
Sonu gupta
From India, Delhi
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