Indian Statutory Compliance, One Place

Statutory compliance in India covers the legal obligations employers must meet under central and state labour laws. Core areas include Provident Fund (EPF), Employees State Insurance (ESI), Professional Tax (PT) across 21 states and UTs, Income Tax TDS under Section 192, Labour Welfare Fund (LWF), Gratuity under the Payment of Gratuity Act 1972, Bonus under the Payment of Bonus Act 1965, and the four new Labour Codes passed in 2019 and 2020.

The four Labour Codes consolidate 29 central labour laws. They are the Code on Wages 2019, Code on Social Security 2020, Industrial Relations Code 2020, and Occupational Safety, Health and Working Conditions Code 2020. The codes were passed between 2019 and 2020 but are not yet fully in force; rules are being progressively notified, so the existing Acts continue to apply.

Professional Tax is a state-levied tax on salaried income. It applies in 21 states and union territories with state-specific slabs based on monthly gross salary. Maharashtra, Karnataka, Tamil Nadu, Gujarat, West Bengal, and Andhra Pradesh have notable PT regimes. Maximum statutory PT is capped at Rs 2,500 per year per employee.

EPF contributions are 12% from the employee and 12% from the employer, calculated on Basic salary plus Dearness Allowance. The wage ceiling for mandatory EPF is Rs 15,000, though most employers extend EPF to actual wages. ECR (Electronic Challan-cum-Return) must be uploaded by the 15th of the following month.

Employees State Insurance contributions are 0.75% from the employee and 3.25% from the employer, on gross wages up to Rs 21,000 per month. ESI applies to factories with 10+ employees and other establishments with 20+ employees in covered areas.

Labour Welfare Fund is a state-administered welfare scheme funded through employee and employer contributions. Rates vary by state and are typically deducted half-yearly in June and December. States like Maharashtra, Karnataka, Tamil Nadu, Gujarat, and Madhya Pradesh have active LWF regimes.

Gratuity is payable under the Payment of Gratuity Act 1972 after 5 years of continuous service. The formula is (Last drawn salary x 15 x years of service) / 26. Gratuity is exempt from tax up to Rs 20 lakh under Section 10(10) for private sector employees.

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