Compliance News @ Mynd: Amendment in Section-192 A of the IT Act

Please find below the summary of the circular detailing the amendments issued by office of the Central Provident Fund Commissioner on applicability of changes in Finance Act 2015 ( insertion of section 192A regarding the taxation on withdrawal of PF Accumulations). Provisions of the said circular shall take effect from 1^st June 2015. The gist of the circular is being given here under-:

1.   Hither to fore no income tax was deducted on the PF accumulations refunded by the PF authorities on the members leaving employment of their employers.

2.   

      Consequent upon amendments carried out through the Finance Act 2015, effective from 1^st June 2015, Income tax will be deducted by the PF Authorities at the time of payment of PF accumulations to the members in the following cases-;

    Where the payment of accumulated PF balance is more than or equal to Rs. 30,000/-, with service less than five years TDS will be deducted  @ 10% provided PAN is submitted but where the members fails to submit the PAN the TDS will be deducted @ maximum marginal rate i.e. 34.608%.

3.    TDS shall not be deducted in the following cases-:

·    Transfer of PF from one account to another PF account.

·    Termination of service due to ill health of member, discontinuation/contraction of business by employer, completion of project or other cause beyond the control of the member.

·   If employee withdraws PF after a period of 5 years of continuous service , including service with former employer.

·     If PF payment is less than Rs 30,000/- but the member has rendered service of less than 5 years.

·    If employee withdraws amount more than or equal to Rs. 30, 000/-, with service less than 5 years but submits Form 15G/15H along with their PAN.

·     Form 15G and 15H may not be accepted if amount of withdrawal individual and senior citizen (60 years and above) is Rs. 2, 50,000/- and Rs. 3,00,000/- respectively. For format for Form 15G/15 H please refer attached document.

 Form 15H is for senior citizens ( 60 and above) while Form 15 G is for individuals having no taxable income.

Note: The provisions of the circular will not apply to PF Trust of relaxed/exempted establishments to whom provisions as contended Rule 8 ,fourth schedule, Part A- Recognised Provident Funds shall continue to apply.(Extracts already enclosed with the attached circular ).

COMPLIANCE NEWS: CHANGES IN DELHI-MINIMUM WAGES....

Please note that there have been changes in the Minimum Wages in Delhi as directed by the LABOUR DEPARTMENT

Please find attached the revised minimum wages notification of Delhi. Minimum Wages has been revised from April 1, 2015.

Reduction in rate of Admin Charges on PF/EDLI contributions

We are forwarding herewith copies of two Notifications bearing  No. S.O.323(E) dated 2nd February, 2015 and 324 (E) dated  2nd February, 2015 issued by Government of India, Ministry of Labour and Employment New Delhi.

Note:  The above mentioned two notifications relate to un- exempted establishments i.e. establishment to which EPF Scheme , 1952 applies. These notifications do not apply to exempted/relaxed establishments which are required to pay inspection charges in place of administrative charges. Similarly notification relating to payment of administrative charges on EDLI contribution apply to only such establishment which report compliance of EDLI , Scheme, 1956 to RPFC concerned. In other words the said notification does not apply to those who subscribe to group insurance policy obtained from an approved insurer.

The following table shows the changes brought about through these notifications:

A. Notifications bearing  No. S.O.323 (E) dated 2nd February, 2015, effective from 1st January 2015
Sr. No	Existing Provisions	Revised Provision	Impact
(i)	The rate of administrative charges payable under para 38 of the EPF Scheme,1952 at present is @1.10% of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon	This rate has now been reduced to 0.85% of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon)	Thus , as a result of the issue of present notification, the liability of an employer towards payment of such administrative charges shall stand reduced  except in cases of smaller establishments who were required to pay the administrative charges @ 1.10% of pay of the members employed by them amounting to rupees less than Rs. 75/-  per month in case of non-functioning establishment  having no contributing member and Rs. 500/- per month per establishment for other establishments.
(ii)	No minimum amount was prescribed for payment of such charges	A minimum sum of Rs. 75/-  per month for every non-functional establishment having no contributory member and Rs. 500/- per month per establishment  for other establishments.
B. Notifications bearing  No. S.O. 324 (E) dated  2nd February, 2015 ,effective from 1st January 2015
Sr. No	Existing Provisions	Revised Provision	Impact
(I)	The rate of payment of administrative charges  on EDLI contribution was prescribed @ 0.01%  of aggregate of the basic wages , dearness allowance(including cash value of food concession ) and retaining allowance  if any payable by the employer in relation to his employees	This rate remains the same	The liability of the employer towards payment of such charges has now gone up in cases of establishments who were paying such charges amounting to less than Rs. 25 per month in case of non-functional establishments having no contributory members and less than Rs. 200 per month per establishment in case of other establishments.
(ii)	The minimum amount payable towards such charges was fixed earlier as Rs.2/- per month vide  notification No . S.O 237 dated 11th Jan 1989	This minimum amount has now  been enhanced to Rs 25 per month for every non-functional establishment having no contributory member and Rs. 200 per month per establishment for other establishments

Manpower Outsourcing_ A Review

Merits of manpower outsourcing

Manpower outsourcing is required to meet the ever growing demand of the corporate for flexibility of work force, improvement in productivity, cost reduction, statutory compliance and faster mobilization & demobilization of people. Mynd offers the absolute solution that covers almost every aspect of HR needs right from recruitment to exit modalities. Outsourcing is a standout amongst the most productive approaches to save expense.

Why opt for Contractual Staffing?

In outsourcing, an outer firm or organization carries on administration or improvement of an item for an alternate firm. The thought began when organizations were hesitant to contract new workers for transient occupations. Absence of gifted laborers is an alternate situation when outsourcing labor requirements is needed. Numerous IT firms, now and again, oblige individuals well- versed in particular engineering, which they may not, generally, have in their asset pool. In such cases, they can contract gifted experts additionally called contract staffing specialists to finish their assignments.

Manpower Outsourcing Procedure

When an organization selects contract staffing specialists, they search for suitable vendors. Vendors blanket the process that they will take after to finish the venture, current monetary position of the organization, specialized capacity of its workers, and all the data, which can help win over the trust of the organization.

A percentage of the profits of outsourcing are recorded underneath: 

·                     First and unequivocally the most essential perspective is expense decrease of improvement of by and large extend.

·                     Hiring labor from an outsource organization who has great and learned talented experts in the field, can enhance nature of the item.

·                     Lowering weight on HR bureau of employing and upholding gifted experts.

·                     Companies can put more stress on planning and examination of an item instead of putting exertion on gathering due dates. 

Organizations today contend to maintain their customers but give a quality administration. The main way they can survive is by lessening their running expense. IT is one of the best and most proficient approaches to decrease the expense of improvement of a venture/