Archive for December, 2009

Finally there is clarity on valuation of perquisites provided by employers to employees, as notified by the Central Board of Direct Taxes on 18 Dec 09 , through introduction of new  norms  called the Income Tax (Thirteenth Amendment Rules) 2009.

The new norms will come into effect with retrospective basis from April 1, 2009. The finance bill presented this year had abolished FBT and perks had become taxable in the hands of the employees. However norms were yet to be introduced on how to value the perquisites.

In the new regime, the value as calculated based on the new norms notified, will be added to the total income of the employee and will be taxed depending on the tax bracket that the employee falls under.

(To view different tax brackets, refer to our blog article dated 21 July 09 (http://www.evetan.com/blog/2009/07/21/budget-2009-10-impact-on-payroll/)

The perquisites that become taxable in the hands of the employees now; include cars, rent free accommodation, services of personal attendant, interests free loans, gift vouchers, employee stock options etc.

For a complete list of taxable perquisites and how to value them, visit: http://www.itatindia.com/datafolder/flash/Flashst19-12-09_1.htm

Team eVetan

IRDA is planning to introduce mediclaim policy portability and is preparing guidelines for general insurance companies for the same.

What does it mean?

If you think your general insurance company is not providing you with satisfactory services with respect to your health insurance policy, you will soon be able to change the company without giving up any benefits.

Essentially when you buy a health insurance policy, you are subjected to medical tests to exclude any existing diseases that you may have. Also you are not allowed any claim during the initial few months. In a scenario where you contract a disease during the policy period, the disease remains covered if you go for the renewal of the policy. However if you wish to change the company, the same disease does not get covered..

With the new guidelines , IRDA hopes to empower the consumers so that they may change the insurance company if services are unsatisfactory without losing any benefits or being subjected to unfair new policy terms.

Our take:

Power to the consumers!Will ensure health insurance companies do not get complacent and are committed to providing the best services to their customers.

– Team eVetan
(For any queries on payroll, salaries, personal finance, personal income tax; write to info@eVetan.com)

EPFO, Employees Provident Fund Organization is considering increasing the minimum wage limit from Rs. 6,500 per month for mandatory deductions in Provident Fund by employers to Rs. 15,000 per month.

What does this mean for employers?

Currently if you have employees with monthly wages (Basic + DA) less than Rs 6,500 per month, it is mandatory for you to make PF deductions (12% employee contribution + 12% employer contribution + 1.61% as PF administration charges). EPFO intends to increase this limit per month to Rs. 15,000. So PF deductions become mandatory if any of your employees have monthly wages less than Rs. 15,000.

eVetan’s take

A progressive step especially for millions of workers who gain access to assured retirement benefits, which otherwise becomes difficult for workers to subscribe themselves.

-Vineet Pandey
(Vineet is a co-founder with eVetan.com. He can be reached at: vineet@eVetan.com)

Professionals in Delhi earning over Rs 30,000 per month may now have to pay a ‘professional tax’ of up to Rs. 200 under the new tax proposal presented by Municipal Corporation of Delhi in its budget for 2010-2011.

The tax will be imposed on all professions, trade callings and employments.

Proposed:

Salary and wage earners may have to pay PT as per the following structure:

Salary/Wage Earned (Monthly) PT
Between 30,000 and 40,000 100
Between 40,000 and 50,000 110
Between 50,000 and 60,000 120
Between 60,000 and 70,000 130
Between 70,000 and 80,000 140
Between 80,000 and 90,000 150
Between 90,000 and 100,000 160
Between 100,000 and 110,000 170
Between 110,000 and 120,000 180
Between 120,000 and 130,000 190
Above 130,000 200

Even those people who are living in Gurgaon and Noida but are working in Delhi will be liable to pay this tax. However as mandated by the Central Government, the tax will not exceed Rs. 2,500 per annum.

eVetan.com will keep you updated with when and if the proposal is accepted and implemented.

In case the proposal is accepted, our customers need not worry, the online payroll engine will have the changes incorporated so that you have a hassle free and most relevant payroll experience.

-Vineet Pandey
(Vineet is a co-founder with eVetan.com. He can be reached at: vineet@eVetan.com)