Question 1

Is PF registration mandatory for all businesses?

Accepted Answer

PF registration under the Employees' Provident Funds Act is mandatory for establishments with 20 or more employees. Smaller establishments can register voluntarily. Once registered, both employer (12% of basic salary) and employee (12%) contribute monthly.

Question 2

What is the due date for PF and ESI payments?

Accepted Answer

PF contributions must be deposited by the 15th of the following month. ESI contributions must be deposited by the 15th of the following month for the contribution period. Late payment attracts damages ranging from 5% to 25% per annum depending on the delay.

Question 3

What is the ESI threshold for employee coverage?

Accepted Answer

Employees earning up to ₹21,000 per month (₹25,000 for persons with disability) are covered under ESI. The employee contribution is 0.75% of gross wages and the employer contribution is 3.25% of gross wages.

Question 4

What is Professional Tax and who needs to pay it?

Accepted Answer

Professional Tax (PT) is a state-level tax on employment income. It is deducted from employee salaries and remitted to the state government. Rates and due dates vary by state — in Tamil Nadu, the maximum PT is ₹2,500 per year. Employers must register and file returns as required by the state.

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