Provisions to be followed by pvt. ltd. co.

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Swati Agarwal (Querist)

21 November 2013 Sir/Madam,

Kindly solve my below mentioned query.

In case of a new private limited company formed what are the provisions of law to be complied with strictly? What are the key areas of concern?
Is private limited company allowed to pay dearness allowance and if yes what should be the basis of calculation of such DA percentage on basic salary?

Nikhil Kaushik

Nikhil Kaushik (Expert)

22 November 2013 all the tax compliances, regulations related PF, ESI, labour laws, factories act, shops and establishment etc etc etc.

With regards to DA:

D.A (Dearness allowance) is the percentage of salary received by employee for his or her performinag in the organization or company.

It is caluclated on the base of basic salary or pension of employee.
It is received twice in the year in the month of january & july.

Dearness allowance vary at each 6 month cycle.After implementation of report , government announced dearness allowance based on CPI-IW (Consumer Price Index - Industrial work)

Calculation of Dearness Allowance

Formula = [ {avg. AICPI for last 12 month - 115.76} *100 ] / 115.76

For 01/01/2007 D.A calculation

avg.AICPI in the year 2007 is = 118.95

D.A on 01/01/2007 = [{ 118.95 - 115.76}*100] / 115.76 = 2%

Similalary , the D.A in the year

01/07/2007 = 6%
01/01/2008 = 9%
01/07/2008 = 12%
01/01/2009 = 16%
01/07/2009 = 22%
01/01/2010 = 27%

Swati Agarwal

Swati Agarwal (Querist)

22 November 2013 Thank you Mr. Nikhil for your guidance.

Nikhil Kaushik

Nikhil Kaushik (Expert)

22 November 2013 you are welcome Swati.

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