Can anyone help me on the following query?
My Company is a manufacturing of Garments. Every month new labor appointed but we are not taken them as employee of the company for first 2 month, after 2 months they will be considered in company payroll.
But the payment for intial 2 months is never accounted due to PF/ESI procedure.
Can we account it other than salary? Last year is almost more than Rs50 lac
No, we have to consider it a
salary...............
Yes, you can account as contractual salaries deducting TDS @ 1% and the expenditure is allowed. If the amount paid to each labourer does not exceed the limit, till they are taken on roles (ie 2 months) no need to deduct TDS.
If we accounted it as salary then we have to deduct PF/ESI and firm contribution.
If we are not deduct PF/ESI then contribution/penalty/interest will be impose by ESI/PF department because PF/ESI also applicable to contact labor.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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