Payroll that just works, every single month.

Our transparent monthly pricing:

• Small Team Plan: ₹3,000/month — for 1-10 employees. Full Section 192 TDS computation, PF + ESI + PT deductions, payslips, Form 24Q quarterly, Form 16 annual, investment proof verification. Additional employees at ₹99/month.
• Growth Team Plan: ₹7,500/month — for 11-50 employees. Everything in Small Team + employee self-service portal, comparative TDS analysis, perquisite valuation, gratuity + leave encashment settlement, unlimited full & final, Labour Codes advisory, quarterly review. Additional employees at ₹149/month.
• Enterprise Plan: ₹15,000/month — for 51+ employees. Everything above + multi-state PT + LWF, ESOP taxation + Sec 194R, PF trust management, dedicated payroll manager + HR business partner, IT Act 2025 migration.

Per-employee effective cost:

• 10 employees on Small Team Plan: ₹3,000 / 10 = ₹300/employee/month
• 30 employees on Growth Team Plan: ₹7,500 / 30 = ₹233/employee/month
• 100 employees on Enterprise Plan: ₹15,000 / 100 = ₹150/employee/month

Plus GST @ 18% on our fees (fully available as ITC).

What's NOT included in monthly fees:

• Statutory deposits (paid on your behalf but debited to your account) — TDS, PF, ESI, PT, LWF as computed
• Payroll software license (Zoho People, Keka, GreytHR, Razorpay Payroll) — separately ₹0-₹200/employee/month depending on choice
• Custom development / integrations
• Legal/labour code litigation
• Full & final beyond plan quota (Small Team: ₹1,999/case)

Cost comparison vs in-house payroll executive:

• Junior payroll executive: ₹3.5-6L/year salary + PF/ESI + gratuity + software + supervision = ₹5-9L/year for 30 employees
• Senior payroll executive (100+ employees): ₹7-15L/year total
• Our Growth Team Plan (30 employees, annual): ₹84,000 + GST
• Saving: 80-92% vs in-house for growing SMEs

Cost comparison vs full HRMS platform:

• Keka: ₹300-₹500/employee/month + implementation ₹50K-₹2L
• GreytHR: ₹150-₹400/employee/month + implementation
• Zoho People + Payroll: ₹200-₹350/employee/month
• Our plans: ₹99-₹299/employee/month (fully managed with CA oversight)

Break-even math — one Section 234E penalty avoided:

• Section 234E ₹200/day late fee, max = TDS amount
• Typical late Form 24Q: 60 days late × ₹200 = ₹12,000 minimum (up to ₹50K for 250-day delay)
• Section 201(1A) 1.5%/month interest on delayed deposit
• Section 272A(2)(g) ₹100/day for missing Form 16 (50 employees × 30 days = ₹1,50,000)
• Our Growth Plan annual = ₹84,000
• ROI: Single Section 272A miss pays for 22 months of retainer

Yes — all payroll processing and statutory expenses are fully tax deductible under Section 37(1) of the Income Tax Act 1961 as ordinary revenue business expenses.

What's fully deductible:

• Our monthly retainer fee (₹3,000 to ₹15,000)
• GST @ 18% on our fees (as ITC if GST-registered)
• Payroll software licenses (Zoho, Keka, GreytHR)
• Employer PF contribution (12% + 0.5% admin) — allowed as expense under Section 36(1)(iv)
• Employer ESI contribution (3.25%) — allowed under Section 36(1)(va)
• Employer LWF contribution — allowed as business expense
• Statutory bonus paid to employees — allowed under Section 36(1)(iv)
• Gratuity payment or contribution to approved gratuity fund — Section 40A(7)
• Leave encashment paid — allowed subject to Section 43B
• Employee salary paid — allowed under Section 37(1)

Section 43B — timing rule:

• Statutory dues (PF, ESI, PT, gratuity, bonus, leave encashment) are deductible only if actually paid before the ITR filing due date
• Otherwise disallowance under Section 43B — carried forward to actual payment year
• Practical impact: employer PF/ESI must be deposited by ITR due date (31 Oct for audit cases, 31 Jul for non-audit) to claim in current FY

What's NOT deductible:

• Section 234E late fee on Form 24Q (bad-in-nature)
• Section 271H penalty for wrong statement
• PF Section 14B damages (penal)
• Section 201(1A) interest — allowed as compensatory (partial view)

GST ITC on our professional fees:

• 18% GST fully creditable if your business is GST-registered
• Our invoice includes GSTIN + flows to your GSTR-2B
• Claim ITC in the month invoice appears in GSTR-2B

What it costs — Growth Team Plan example:

• Monthly fee ₹7,500 + 18% GST (₹1,260) = ₹8,850
• If you are GST-registered, the GST on our fee is available as input tax credit
• The fee itself is a deductible business expense
• For a 30-person team, about ₹233 per employee a month before GST

Section 192 (Salary TDS) penalties:

• Section 201(1): Employer is "assessee in default" for short/non-deduction — liable to pay the TDS amount
• Section 201(1A): Interest at 1% per month for non-deduction, 1.5% per month for non-deposit after deduction
• Section 234E: Late filing fee for Form 24Q — ₹200 per day of delay, capped at the TDS amount
• Section 271H: Penalty for wrong statement — ₹10,000 to ₹1,00,000
• Section 272A(2)(g): Failure to issue Form 16 — ₹100 per day per certificate
• Section 276B: Wilful failure to deposit TDS — prosecution: 3 months to 7 years imprisonment + fine

Real penalty examples:

• Form 24Q Q4 filed 60 days late for 30 employees: 60 × ₹200 = ₹12,000 + Section 271H notice risk
• Form 16 not issued to 50 employees on time (30 days delay): 50 × 30 × ₹100 = ₹1,50,000
• TDS ₹5L not deposited for 6 months: Section 201(1A) 1.5% × 6 × ₹5L = ₹45,000 interest + full TDS payable

PF (EPF Act 1952) penalties:

• Section 7Q: Interest at 12% per year on delayed contributions
• Section 14B: Damages for delay:
  • Up to 2 months late: 5% of dues
  • 2-4 months: 10%
  • 4-6 months: 15%
  • 6+ months: 25% (max)
• Section 14: Prosecution for wilful non-payment — 1 to 3 years imprisonment + fine ₹10,000
• Section 14AA: Enhanced punishment for repeat offence — up to 5 years

ESI (ESI Act 1948) penalties:

• Section 39(5): Simple interest at 12% per year on delayed contributions
• Section 85: Fine of ₹5,000 or 6 months imprisonment for non-compliance
• Section 85A/85B: Enhanced penalty for false statements, non-payment of contribution
• Recovery under Revenue Recovery Act — attachment of bank/property

Professional Tax state penalties:

• Maharashtra: 25% penalty + 2% per month interest
• Karnataka: ₹1,000 penalty + interest
• Tamil Nadu: 2% per month + fine up to ₹5,000
• Other states: similar structure

Gratuity non-payment penalties:

• Section 8 Payment of Gratuity Act: interest from date of separation to date of payment
• Interest rate: RBI-notified (currently ~10%)
• Fine + imprisonment for wilful non-payment

Aggregate impact scenarios:

• Small business, 15 employees, all statutory late 6 months: ~₹2-4 lakh combined penalties + interest
• Growing business, 50 employees, PF late 12 months + Form 16 missed: ~₹6-10 lakh
• Enterprise 200 employees, TDS + Section 276B non-deposit for 1 year: ~₹20-50 lakh + prosecution risk

How our retainer eliminates penalty risk:

• Automated deposit calendar: 5-day buffer before 15th (PF/ESI/PT) and 7th (TDS)
• Two-tier CA review before any statutory deposit
• Form 24Q filed by 15th of return month (16-day buffer before 31st)
• Form 16 delivered by 5-10 June (10-day buffer before 15 June deadline)

Perquisites are non-monetary benefits provided by an employer to an employee, taxed as salary under Section 17(2) of the Income Tax Act 1961. Valued per Rule 3 of Income Tax Rules 1962.

Categories of perquisites:

1. Rent-Free Accommodation (RFA):
   • Employer-owned unfurnished: 10-15% of salary (population-based: 15% for population > 40L, 10% for < 40L)
   • Employer-leased: rent paid or 15% of salary, whichever lower
   • Furnished: additional 10% of cost of furniture
   • Accommodation in hotel: 24% of salary or actual charges
2. Concessional Accommodation: difference between calculated perk value and rent paid by employee
3. Company Car (motor car provided by employer):
   • Small car (≤ 1.6L cc): ₹1,800/month (or ₹2,400 with chauffeur) if used partly for personal
   • Large car (> 1.6L cc): ₹2,400/month (or ₹3,000 with chauffeur) if used partly for personal
   • Fully personal use: actual expenditure + 10% depreciation
4. Employer's contribution to PF/NPS:
   • PF > 12% of basic salary — excess taxable
   • NPS employer contribution > 14% of salary — excess taxable
   • Combined employer PF + NPS + Superannuation > ₹7.5L/year — excess taxable
5. Interest-free/concessional loan: difference between SBI's prevailing lending rate and actual rate charged by employer, on loans > ₹20,000
6. Employer-paid utility bills: gas, electricity, water — actual expense taxable
7. Free/concessional education: to employee's children in employer-owned institution
8. Free food and beverages: at office beyond ₹50/meal is taxable (Rule 3(7)(iii))
9. Free travel: LTA beyond exemption (twice in 4-year block)
10. Club membership: if for personal use, actual expenditure taxable
11. Gift/voucher/gift-in-kind: value > ₹5,000 in aggregate per year taxable
12. ESOP (Employee Stock Option Plan):
    • On exercise: (FMV on exercise date - exercise price) × shares = perk value
    • Taxed as salary in year of exercise
    • Startups: taxation deferred up to 5 years or resignation or sale of shares under Section 17(2)(vi) proviso

Exempt perquisites (not taxed):

• Medical reimbursement up to ₹15,000/year (under old regime)
• Employer's telephone/mobile bills
• Free meals at office up to ₹50/meal
• Uniform allowance (actual)
• Employer's contribution to group medical insurance
• Employer's payment for education/training of employee (if job-related)
• Refreshments during office hours
• Recreational facilities uniformly extended

Perquisite valuation timing:

• Monthly value added to salary for TDS computation
• Employer computes perquisite value each month + deducts TDS accordingly
• Form 12BA issued along with Form 16 detailing perquisites
• Section 194R TDS separately applicable for benefits given to non-employees

Common employer errors:

• Not including RFA in TDS computation → under-deduction → Section 201 liability
• Wrong RFA valuation (using outdated 15% rule where population-based rates apply)
• Missing ESOP exercise gains in TDS
• Not tracking gifts crossing ₹5,000 aggregate
• Employer PF contribution > 12% not flagged as perk

How our retainer handles perquisites:

• Perquisite audit at onboarding for every employee
• Rule 3 valuation memo per employee per FY
• Monthly perk-inclusive TDS computation
• Form 12BA generated with Form 16
• ESOP exercise triggers immediate TDS re-computation

Complete FY 2025-26 payroll compliance calendar:

Monthly (throughout FY 2025-26):

• By 1st-3rd of next month: Salary credited, payslips generated
• By 7th: TDS deposit (Section 192)
• By 15th: PF ECR filed + deposit (EPFO portal), ESI challan deposit
• By 15th or state-specific: Professional Tax deposit (monthly for most states)
• Ongoing: LWF deposits per state schedule

Quarterly TDS returns (Form 24Q):

• Q1 (Apr-Jun) return: Due 31 July
• Q2 (Jul-Sep) return: Due 31 October
• Q3 (Oct-Dec) return: Due 31 January
• Q4 (Jan-Mar) return: Due 31 May — includes Annexure II with employee-wise details

Annual — Form 16 and related:

• By 15 June: Form 16 issued to every employee for FY 2025-26 (including resigned)
• Form 12BA (perquisites detail) issued along with Form 16
• By 15 June: Form 16A for TDS on non-salary payments

Annual — PF/ESI:

• By 30 April: Annual PF return (Form 3A + Form 6A)
• By 12 November: ESI return of contributions (April-September 2025 period)
• By 12 May: ESI return of contributions (October 2025-March 2026 period)

Investment declarations + proofs:

• April 2025: Form 12BB investment declarations collected from all employees
• Form 10-IEA: Old regime opt-out submitted by employees
• January-February 2026: Investment proofs verified against declarations
• March 2026: Final TDS recomputation for FY-end reconciliation

Bonus (Payment of Bonus Act):

• By 30 November: Statutory bonus paid for FY 2025-26 (within 8 months of accounting year close)
• Bonus Form D filed with labour department

Gratuity provision:

• Actuarial valuation done annually (typically Mar/Apr)
• Provision in financial statements per AS 15/Ind AS 19
• Trust deposit if using approved gratuity fund

Labour Codes compliance (from 21 Nov 2025):

• CTC restructuring: basic + DA ≥ 50% of gross (one-time exercise)
• Wages register in prescribed format
• Standing orders review (for 300+ employee establishments)
• Grievance redressal committee constitution

IT Act 2025 transition (from 1 April 2026):

• Section 192 → Section 392 (payroll software update)
• Form 16 → Form 130 (issued for FY 2026-27 onwards)
• Tax Year concept replaces AY/PY

Our retainer schedule (5-day buffer everywhere):

• Salary credited: 1st of month
• TDS deposited: 5th (2-day buffer before 7th)
• PF/ESI/PT deposited: 12th-13th (2-3 day buffer before 15th)
• Form 24Q filed: 15-20 days into return month (10-15 day buffer)
• Form 16 delivered: 5-10 June (10-day buffer before 15 June)

There is no "presumptive salary" regime — Section 192 TDS on salary is always computed at the average rate on estimated income. However, employees receiving salary can choose between:

1. New Tax Regime (Section 115BAC — DEFAULT):

• Automatic default from FY 2023-24 onwards
• Employer applies new regime unless employee submits Form 10-IEA
• Standard deduction ₹75,000 only major deduction
• Simpler compliance — no investment proofs needed at deduction stage
• Best for young professionals + income up to ₹12.75L (zero tax)

2. Old Tax Regime (via Form 10-IEA):

• Comprehensive deductions available (80C ₹1.5L, 80D, HRA, LTA, home loan)
• Requires investment declarations (Form 12BB) at start of year
• Proof verification in Jan-Feb
• Best for employees with high investments + home loan + HRA

Salaried employees can switch each year — old regime one year, new the next.

Confusion vs Section 44ADA (professional):

• Section 44ADA is for professionals (doctors, lawyers, CAs, engineers, consultants) with gross receipts ≤ ₹75 lakh
• 50% of receipts deemed as profit
• NOT applicable to salaried employees — different tax head (professional/business income vs salary)
• Doctors employed in hospitals: salary head, cannot use 44ADA
• Consulting doctors / freelance CAs with own practice: business income, can use 44ADA

Confusion vs Section 44AD (small business):

• Section 44AD is for small businesses (proprietors, HUFs, partnership firms) with turnover ≤ ₹2 crore
• 8% (6% digital) deemed as profit
• NOT applicable to salaried employees or LLPs or companies
• Employee-shareholder-director salary: still Section 192 TDS, not 44AD

Special case — director sitting fees and remuneration:

• Director sitting fees: Section 194J TDS at 10% (professional services), NOT Section 192
• Director salary (executive/whole-time director): Section 192 TDS at slab rates
• Director commission on turnover: Section 194J TDS at 10%
• Partner remuneration in LLP/firm: Section 194T TDS at 10% (new from Sec 194T, added Finance Act 2024) — not Section 192 as partners aren't employees

Contract employees / gig workers:

• If genuine employer-employee relationship (working hours defined, employer control, tools provided): Section 192
• If independent contractor (own hours, no employer control, invoices raised): Section 194J or 194C
• Misclassification risk: employer's Section 201 liability if wrongly treated as contractor when actually employee
• PF/ESI applicability also depends on classification

How our retainer handles regime choice:

• At joining: comparative TDS analysis (new vs old regime) provided to employee
• Employee's informed choice recorded in file
• Form 10-IEA collected + filed by 15 April (if old regime opted)
• Monthly TDS applies chosen regime
• Mid-year regime change not allowed for TDS
• At FY-end filing (July), employee can change regime while filing ITR (subject to conditions)

A well-designed monthly payroll cycle is critical for statutory compliance. Here's our standard workflow:

Days 25-28 of running month — Cycle preparation:

1. Attendance closure — biometric/HRMS data pulled
2. Leave register updated — leave balance, LOP (loss of pay) calculated
3. Overtime hours captured
4. Reimbursement claims received + validated
5. Any exit/joiner adjustments
6. Variable pay/incentive data received

Days 28-30 — Salary computation:

1. Gross salary calculation per employee:
   • Basic (as per CTC breakup)
   • DA (if applicable)
   • HRA
   • Special allowance
   • Conveyance / transport allowance
   • Medical allowance
   • Other allowances (LTA, food coupons)
   • Overtime
   • Reimbursements (fuel, telephone, driver)
   • Variable pay/bonus
2. LOP adjustment — deduct for unpaid absences
3. Statutory deductions:
   • Employee PF (12% of basic + DA)
   • Employee ESI (0.75% of wages if applicable)
   • Employee Professional Tax (state-specific)
   • Section 192 TDS (calculated at average rate)
   • LWF (state-specific)
4. Other deductions: loan repayments, canteen, rent, notice pay recovery

Days 30-31 — Validation and approval:

1. Peer review by senior payroll executive
2. Comparative check against previous month (unexplained variances flagged)
3. Employer PF (12% + 0.5% admin) computed for accounting
4. Employer ESI (3.25%) computed
5. Client approval on final salary register + statutory deposit summary

Day 1 of next month — Salary payout:

1. Bank file (NEFT/RTGS/IMPS) generated with salary amounts
2. Client uploads/approves in banking portal
3. Salary credited to employee accounts on 1st (or agreed date)
4. Payslips generated + emailed to employees or accessible via portal

Days 2-7 — TDS deposit:

1. Section 192 TDS computed for the month across all employees
2. TDS challan (Form 281) generated on IT portal
3. Deposit via net banking by 7th (with 2-day buffer target of 5th)
4. BSR code + challan number captured for Form 24Q

Days 12-15 — PF/ESI/PT deposits:

1. PF ECR (Electronic Challan-cum-Return) file generated + uploaded to EPFO portal
2. PF payment via SBI/PNB net banking by 15th
3. UAN details validated for every employee
4. ESI challan generated on ESIC portal + payment by 15th
5. PT challan per state schedule + payment
6. LWF payment if applicable

Quarterly (Form 24Q):

1. Q1/Q2/Q3: filed by end of month following quarter (31 Jul, 31 Oct, 31 Jan)
2. Q4: filed by 31 May with Annexure II employee-wise detail
3. Data compiled from monthly TDS records
4. Filed on TRACES/TIN-NSDL portal
5. Correction statements filed if needed

Annual (Form 16):

1. Q4 Form 24Q filed 15-16 May (buffer)
2. Form 16 Part A downloaded from TRACES for each employee (typically available 15-25 May)
3. Form 16 Part B prepared by us with salary breakdown, perquisites (Form 12BA), deductions
4. Delivered to employees by 5-10 June (well before 15 June deadline)
5. Even resigned employees receive Form 16 via last known email + portal

Our quality checkpoints:

• Every employee has PAN + Aadhaar + UAN + ESI IP validated at joining
• Monthly comparison: current month vs previous month vs average — auto-flag variance > 10%
• New regime vs old regime comparative analysis at joining + annually
• All statutory deposits with 2-3 day buffer before deadline
• Two-tier CA review before Form 24Q filing

The Income Tax Act 2025 was enacted to replace the Income Tax Act 1961 and comes into effect from 1 April 2026 (Tax Year 2026-27). Payroll-relevant changes:

Section renumbering:

• Section 192 → Section 392 — Salary TDS provisions
• Section 194 series → Section 393 series — Other TDS provisions
• Section 115BAC (new regime) → Section 202 series
• Substantive rules and rates unchanged; only numbering + terminology

Form renumbering:

• Form 16 → Form 130 — Annual TDS certificate for salary
• Form 16A → Form 131 — TDS certificate for other payments
• Form 24Q → Form 26Q (renumbered) — Quarterly salary TDS return
• Form 26AS → Form 133 — Consolidated annual TDS statement

Conceptual changes:

• Assessment Year (AY) + Previous Year (PY) → Tax Year
  • Old: FY 2025-26 (Apr 2025-Mar 2026) with AY 2026-27
  • New: Tax Year 2025-26 covers both concepts
  • ITR filing period: within same terminology
• Search + seizure provisions reorganized
• Reassessment provisions reorganized

What stays unchanged:

• Tax slab rates (new regime): Nil ₹4L / 5% / 10% / 15% / 20% / 25% / 30%
• Standard deduction ₹75,000
• Section 87A rebate up to ₹60,000
• 4% Health and Education Cess
• Due dates: TDS 7th, Form 24Q quarterly, Form 16 by 15 June
• Penalty structure: Section 234E, 201(1A), 271H, 272A(2)(g), 276B (renumbered)
• Perquisite valuation Rule 3
• PF/ESI/PT external laws untouched

Effective date and transition:

• 1 April 2026: IT Act 2025 comes into force
• FY 2025-26 completed under old Act (Form 16 for FY 25-26 issued in June 2026 under old Act)
• FY 2026-27 onwards: under new Act (Form 130 for FY 26-27 issued in June 2027)
• Transition period: April 2026 - March 2027 for software/process updates

What employers must do:

1. Update payroll software — Zoho People, Keka, GreytHR, Razorpay Payroll all rolling out updates
2. Update employee communication — Form 16 references, section citations
3. Update employment contracts — Section references in TDS clauses
4. Train HR/payroll team — new section + form references
5. Update chart of accounts — TDS payable ledger reference
6. Update statutory audit workpapers — Section 143 audit under new Act

Litigation/notice implications:

• Existing notices under old Sections 192, 201, 234E continue for old years
• New notices from 1 April 2026 under new Section 392, 502, etc.
• Case law under old Act remains binding precedent (subject to interpretation of parallel new provisions)

Timing of compliance obligations under new Act:

• Section 192 last applies for FY 2025-26 salary payments (TDS deposit up to 30 April 2026 for March salary)
• Section 392 first applies for FY 2026-27 salary payments (TDS deposit from 7 May 2026 for April 2026 salary)
• Form 24Q Q4 FY 2025-26 filed by 31 May 2026 — under old Act
• Form 24Q Q1 FY 2026-27 filed by 31 July 2026 — under new Act (renumbered form)
• Form 16 for FY 2025-26 issued 15 June — under old Act
• Form 130 for FY 2026-27 issued 15 June 2027 — under new Act

Our retainer transition support:

• Payroll software pre-configured for both Act references
• Employee FAQ document with old + new section mappings
• Transition compliance calendar
• Dedicated advisory hours for FY 2026-27 Q1 questions
• All existing FY 2025-26 obligations completed on schedule under old Act