Compliance Calendar for April, 2018

Income Tax Exemption on Gratuity

Gratuity is a benefit given by the employer to the employee. A recently approved amendment by the Centre has increased the maximum limit of gratuity, to be exempted from tax to Rs. 20 Lakhs from the existing ceiling of Rs. 10 Lakhs.

This will be applicable to the private sector and public sector employees. Calculations for exemption of gratuity under the Income Tax Act are covered under section 10(10).

Gratuity Tenure Likely To Be Reduced From Five To Three Years

The Payment of Gratuity Act 1972 was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments. It is applicable to employees who have completed at least five years of continuous service in an establishment that has ten or more persons.

The Union Government may reduce the time limit to claim gratuity from existing 5 years to 3 years. Sources have said that although labour ministry may agree with the industry demand on lowering the gratuity tenure to three years, labour unions have been demanding a further decrease in the tenure.

Modification In Inspection Policy In Respect Of Defaulting Establishments

For the purpose of streamlining the inspection procedure, it has been decided that henceforth field offices don’t need any permission for inspection in respect of cases listed in Category ‘A’ & ‘B’ of the “Defaulter’s List (Category wise)” to be displayed on the Dashboard of the CAIU Portal every month.

It may be noted that in the category wise list, there are three categories A, B & C with default for 4 or more wage months, for 2 or 3 wage months and for 1 wage month respectively.

Regarding inspection of establishments falling in categories ‘A’ & ‘B’, RPFC may give priority to big defaulters keeping in view quantum of default in terms of remittances and number of employees.

However, all other steps regarding inspection procedure should be followed in accordance with the extant Head Office guidelines on the matter.

Fixed Term Employees Hiring Of Workers Permitted By Government

Fixed Term Hiring of workers permitted by government In order to generate more employment and steps towards ‘ease of doing business’, the Government by a notification dated 16.3.2018 has an allowed-fixed term or contractual employment in all industrial sectors, a provision that until now applied only to apparel manufacturing. The move will effectively provide for a ‘hire-and-fire’ policy by doing away with existing retrenchment norms applicable to the workers engaged in the industrial establishments as covered by Industrial Employment (Standing Orders) Act, 1946 generally employing 50 or more workers. The ‘industrial employment’ is defined by section 2 of the Payment of Wages Act applying to factories, railways, transport services, air transport services, mines, plantation, construction, development or maintenance of buildings, roads etc.

[It is pertinent to state here that the shops, establishments or other industries not covered by Industrial Employment (Standing Orders) Act could validly engage workers on fixed term basis as per section 2(oo)(bb) of the Industrial Disputes Act, 1947]

Aadhaar-Verified Digital Life Certificate Not Must For Pension: EPFO

The EPFO issued a circular on March 23, stating that pensioners who were unable to submit digital life certificate should not be deprived of pension they are entitled to receive. The EPFO has done this as it has been brought to their attention that pensioners have stopped receiving pension due to non-submission of Digital Life Certificate or Jeevan Pramaan. In the circular, the EPFO has asked officers to re-examine all rejected cases and in that genuine cases are accepted. This circular pointed out the alternative methods for digital life certificate detailed in its November 8 circular.

EPFO To Open MAY I HELP YOU Counters To Facilitate Online Claim Filing

It is proposed to have a campaign for going paper-free during the next two months, namely, March and April 2018 with focus on verifying AADHAAR for the members so that all claims are received online avoiding submission of paper-claims. In this regard, EPFO India has decided to facilitate the same by putting up separate “MAY I HELP YOU” counters in all the field offices that will educate, facilitate and guide the stakeholders about the filing of online claims.

Minimum Wages Updates

Online PF Withdrawal Process