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1. What is Pay or Salary ?

Every employed or working individual gets wages for his work, whether it is daily, weekly, biweekly or monthly depends on the nature of work and policies of firm. Salary also include as per the rules of particular company other benefits for employee like health insurance, conveyance allowance, dearness allowance, Life insurance etc, Salary is taxable.

2. What are the main features of Websoftex Payroll Software ?

HR-Payroll Software as the name suggests maintains both Human Resource Data as well as Salary Management.
For HR it has modules for maintaining Online Applications, Reminders to Candidates, Recruitment Process ( Interviews, selections & email Notifications).
For Salary Management it has very important module for Employee Attendance, KPI (Key Performance Indicator)

3. What is PAN Card ?

Permanent Account Number (PAN) is unique alphanumeric combination issued to all citizens of India under the Indian Income Tax Act 1961. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and is almost equivalent to a national identification number. It also serves as an important ID proof.

This number is almost mandatory for financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits.

The PAN is unique, national, and permanent. It is unaffected by a change of address, even between states.

4. What does Allowance mean ?

Allowance is a fixed amount of money which is given with salary under different benefit categories like Medical, dearness, conveyance, house rent allowance etc. They can be taxable or non- taxable.
1. Fully taxable cash allowances - Dearness Allowance, City Compensatory Allowance,    Tiffin / Lunch Allowance, Overtime Allowance, Servant Allowance, Fixed Medical    Allowance, etc.
2. Partially exempt cash allowances – House Rent Allowance, Entertainment Allowance,    Special Allowances for meeting official expenditure, Special Allowances to meet    personal expenses.
3. Fully exempt cash allowances- Foreign Allowance.

5. What is form 16 ?

Form 16 is a certificate issued by the employer to their employees under section 203 of Income Tax Act of 1961 and the Income Tax Rules of 1962 for Tax deducted at Source (TDS) from the income chargeable under the head “Salaries”. This is issued yearly and original form 16 is required to file individual Tax Returns.

6. How to calculate HRA ?

From the House Rent Allowance (HRA) received as part of salary during the year, least of the following three amounts is exempted from tax (or not included in income):

HRA allowance actually received Rent paid –10% salary (Basic + DA forming part of salary + commission as a % of turnover) 40% of salary (50% for Metro city)

7. What are the various deductions allowed under Chapter VI A ?

80D- Medical Insurance: Deduction on premium paid, up to Rs. 15,000 for self (aged below 60 years) and Rs. 20,000 in case of Senior citizen.

80C – Amounts paid towards LIC Premium, contribution towards recognized, PF, ESI & Super annulations fund, Mutual funds subscriptions etc. with a deduction upto Rs. 1, 00,000.

80DD- Medical treatment for Handicapped Dependant: Deduction on medical treatment and maintenance of handicapped dependant up to Rs.50,000 for disability below 80% and Rs. 1,00,000 for disability above 80%.

80DDB- Medical treatment for Specified Illness/Diseases: Deduction on medical treatment of specified illness/diseases is up to Rs.40,000 for general category and Rs. 60,000 in case of senior citizen.

80E- Interest on Education Loan: Repayment of interest paid in the current year on loan taken for higher education is eligible for deduction, if the loan availed was for pursuing employee’s own higher education. There is no limit on the deduction.

80U- Permanent Physical Disability: Assesses certified by the medical authority to be a person with permanent physical disability is allowed a deduction of a sum of Rs. 50,000 and in case the assesses is certified as one with (severe) permanent physical disability, deduction is Rs. 1, 00,000.

80G- Donations: For deduction in respect of donations to certain funds, charitable institutions etc, the employee can claim the deduction while filing individual returns

8. What is Concept of CTC (Cost to Company) ?

CTC is the cost that a company spends on its employee.

9. What are Components of CTC ?

1. Basic 2. Dearness Allowance (DA) 3. Incentives or bonuses 4. Conveyance allowance 5. House Rent Allowance (HRA) 6. Medical allowance 7. Leave Travel Allowance or Concession (LTA / LTC) 8. Vehicle Allowance 9. Telephone / Mobile Phone Allowance 10. Special Allowance

10. What are reimbursements ?

Reimbursements are amounts of money which are always claimed, i.e. claimed after being spent. Like Medical reimbursement, is first spent by the employee on a medical treatment and then claim is made to the company.

11. What are the statutory deductions from salary ?

PF (Provident Fund), ESI (Employees' State Insurance), PT (Professional Tax)and TDS (Tax Deducted at Source)are considered as Statutory Deductions that are to be deducted from salary.

12. What is PF (Provident Fund) ?

Provident Fund (Bhavishya Nidhi) is like pension or insurance which is accumulated in your account by deducing a percentage of your monthly salary. In private firms an employee can withdraw PF after leaving the firm. In government office employee gets PF after retirement.

13. Who are covered under PF ?

All establishments with 20 or more employees are covered under the PF Act. Both employer and employee contribute 12% of basic salary to the Provident Fund (Total 24 %). Indian employees with salary in excess of Rs 6,500 per month were required to only contribute 12% on a maximum salary of Rs 6,500 per month. Maximum compulsory contribution by each person was Rs 780 per month (12% of Rs 6,500).

14. Are foreign nationals also covered in PF ?

Effective from Nov 1, 2008. All foreign nationals deputed to India automatically became part of the PF scheme provided the Indian establishment was covered under PF scheme i.e. employed more than 20 staff. No minimum period of working in India required.

15. What is voluntary PF ?

An employee can contribute willingly to his PF where only his share will be contributed and not his employer’s.
For e.g. a person is willing to add 2% in his PF i.e. he wants to contribute a total of 14% then this extra 2% will be contributed from his side only his employer will contribute only fixed 12%.

16. What is Zero Pension ?

An employee may opt for Zero Pension, it means that all his PF contribution will go to Provident Fund Instead of its 8.33% going to pension plan.

17. What are the advantages of PF ?

1. It is a secure savings plan.
2. Employees and their families are eligible for income in the case of death, disability or     retirement.
3. Employer’s contribution (from Annual Monthly Gross) is totally tax exempt.
4. Employee’s Contribution is eligible for Sec. 88 rebate / 80C Deduction.
5. Income generated by the fund is tax exempt. Interest on Employer and Employee     contributions are tax free.
6. Advances / Loans for specific reasons can be availed from the provident fund corpus.
7. Employees PF account is portable between employers.
8. The accumulations cannot be attached by in case of default of loans.

18. What is PPF ?

PPF (Public Provident Fund) is the voluntary provident fund which can be opened by any employed Indian individual with any national bank in any of its branches. The minimum amount to be deposited in to a PPF account is Rs. 500/- per year and the maximum is Rs.1,00,000/- per year.

19. What is ESI (Employee State Insurance) ?

The ESI act has been passed to provide benefits to employees in medical urgency, Maternity and disability.

20. What is ESIC ?

Employees State Insurance Corporation (ESIC) has been formed to supervise the scheme under section 3 of the Act.

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