Payroll articles
Running Indian payroll: salary structures, PF and ESI on pay, TDS on salary, arrears, final settlement and payroll operations.
- Company Car and Company Flat: The Taxable Value Under the Income-tax Rules, 2026
10 Oct 2026 · From 1 April 2026 a company car used privately is valued at ₹5,000 or ₹7,000 a month plus ₹3,000 for a chauffeur, and a company-owned flat at 5% to 10% of salary by city population. The tables, a Chennai example and what the tax regime changes.
- Hired Mid-Year: Counting the Previous Employer’s Salary and TDS Through Form 122
10 Oct 2026 · An employee who joins mid-year can declare the previous employer’s salary and TDS on Form 122, which replaced Form 12B from 1 April 2026. If it is not given, each employer deducts as if it were the only one, and the gap surfaces at return time with interest.
- Salary Arrears Paid This Year: Section 157 Relief and Form 39 (Earlier Form 10E)
10 Oct 2026 · Arrears paid in tax year 2026-27 are taxed in the year of receipt, but section 157(1) of the Income-tax Act, 2025 gives relief through Form 39, which replaced Form 10E. The four-step computation, a Nashik example and the employer’s checks.
- Pay Revised From the 16th: Prorating Salary, PF, ESI and TDS for a Split Month
10 Oct 2026 · When a raise takes effect mid-month, prorate each salary component by days at the old and new rates. Then recheck PF wages against the ₹25,000 ceiling, keep ESI to the end of the contribution period and re-project TDS for the rest of the tax year.
- Notice Period Buyout and Shortfall Recovery: Settling It Within Two Working Days
10 Oct 2026 · The Code on Wages requires final wages within two working days of the last day, and notice pay is not on its list of permitted deductions. How to show a buyout in the settlement, recover a shortfall separately and treat it for TDS, with a Gurugram example.
- HRA in Ahmedabad, Bengaluru, Hyderabad and Pune Is Now 50%: What Payroll Must Change
8 Oct 2026 · From 1 April 2026, employees living in Ahmedabad, Bengaluru, Hyderabad and Pune can claim HRA exemption up to 50% of salary instead of 40%. Who gains, a worked example, why it matters only under the old regime, and what payroll should update.
- Meal Cards, Gifts and Education Allowance: The Salary Limits That Rose in 2026
8 Oct 2026 · The Income-tax Rules, 2026 raised tax-free meal vouchers to ₹200 a meal, employer gifts to ₹15,000 a year, children education allowance to ₹3,000 a month and hostel allowance to ₹9,000 a month. What applies in each tax regime and how to update salary structures.
- Old or New Tax Regime in 2026-27? Three Salaries Worked Out
8 Oct 2026 · Tax worked out under both regimes for salaries of ₹12 lakh, ₹18 lakh and ₹25 lakh for Tax Year 2026-27, the deductions that make the old regime worth it, and how employees and payroll teams should handle the choice.
- Employer NPS Contribution at 14%: The One Tax Break Left in the New Regime
8 Oct 2026 · Employer contributions to an employee’s NPS account are deductible up to 14% of salary in the new tax regime. A worked example, the ₹7.5 lakh yearly cap on employer retirement contributions, and how to add NPS to a salary structure.
- Salary Advances and Employee Loans: The New ₹2 Lakh Tax-Free Limit
8 Oct 2026 · Under the Income-tax Rules, 2026, interest-free or low-interest employer loans up to ₹2 lakh carry no perquisite tax, up from ₹20,000. How the perquisite is valued above that, salary deduction limits, and a loan policy checklist.
- Diwali Bonus and Gifts to Employees: Tax, GST and Payroll in 2026
8 Oct 2026 · A Diwali cash bonus is fully taxable salary, but gifts and vouchers to an employee are tax-free up to ₹15,000 a year under the Income-tax Rules, 2026. GST on employee gifts, input tax credit, and how to run festive payouts through payroll.
- Gratuity for Fixed-Term Employees After One Year: How to Calculate and Provide for It
8 Oct 2026 · Under the Code on Social Security, fixed-term employees are entitled to gratuity after one year of service, pro rata. The formula, a worked example, the effect of the 50% wage rule, and how to budget and update contracts.
- When Must Salary Be Paid? The 7th-Day Rule and the 50% Deduction Limit Under the Code on Wages
8 Oct 2026 · Under Section 17 of the Code on Wages, monthly wages must be paid before the 7th of the next month, and dues on resignation or dismissal within two working days. Deadlines for every wage period, the cap on deductions, and a payroll calendar that meets them.
- Salary Structure in India: Basic, HRA, Allowances and Employer Contributions
3 Oct 2026 · A plain-English guide to salary structure in India: basic pay, HRA, special allowance, employer PF and gratuity, and how the split changes take-home pay and tax.
- Gross Pay vs Net Pay: What Employees See and What Employers Pay
3 Oct 2026 · Understand gross pay vs net pay in India. Learn which deductions move gross salary to take-home pay, how to calculate net salary, and how to explain it on a payslip.
- LPA Salary Explained: How to Convert a CTC Package to Monthly In-Hand Pay
3 Oct 2026 · LPA means lakhs per annum. Learn how to convert an LPA package to monthly in-hand salary, with examples and the deductions that reduce your take-home.
- Special Allowance in Salary: What It Is and How It Is Taxed
3 Oct 2026 · Special allowance is a fully taxable component of salary used to balance CTC. Learn how it is calculated, whether it attracts PF, and how employers should structure it.
- Taxable, Non-Taxable and Partly Taxable Salary Components Explained
3 Oct 2026 · Which salary components are taxable in India? A clear guide to fully taxable, partly taxable and exempt elements of salary, with examples for payroll teams and employees.
- Loss of Pay (LOP): Meaning, Formula and Common Payroll Mistakes
3 Oct 2026 · What is loss of pay (LOP)? Learn the LOP formula, whether to use calendar or working days, worked examples and the mistakes that cause payslip disputes.
- Performance Bonus vs Variable Pay: How to Design Both Fairly
3 Oct 2026 · Compare performance bonus and variable pay: definitions, payout formulas, tax treatment, design tips and common pitfalls for Indian employers.
- Sign-On Bonus in India: Taxation, Clawback and Policy Tips
3 Oct 2026 · A guide to sign-on or joining bonuses in India covering tax treatment, clawback clauses, notice-period conditions and how to draft a clear policy.
- Fuel Reimbursement: How to Structure It and What Is Taxable
3 Oct 2026 · How fuel reimbursement works in Indian payroll: bill-based claims, tax treatment, policy design and the documents needed to keep it audit-ready.
- Year-End Payroll Checklist for the Indian Financial Year
3 Oct 2026 · A year-end payroll checklist for Indian employers: tax proofs, final TDS, appraisal arrears, bonus provisions, Form 130 (Form 16) preparation and records to close the financial year.
- Superannuation Fund: How Employer Retirement Benefits Work in India
3 Oct 2026 · Superannuation explained for Indian employers and employees: contribution limits, tax treatment, taxation on payout and how it differs from PF and NPS.
- The Payroll Process, Step by Step: From Attendance Data to Bank Transfer
3 Oct 2026 · Understand the monthly payroll process in India: collecting inputs, computing earnings and deductions, approvals, disbursement, statutory payments and record keeping.
- Pre-Payroll and Post-Payroll Activities: A Two-Part Checklist
3 Oct 2026 · A checklist of pre-payroll and post-payroll activities for HR and finance teams, including data checks, approvals, statutory filings, reconciliation and reporting.
- Payroll Reports Every Employer Needs: From Registers to Cost Analysis
3 Oct 2026 · Which payroll reports should Indian employers generate each month? Learn about salary register, variance report, statutory reports, bank advice and cost-to-company analysis.
- Payroll Journal Entries: How to Account for Salaries, PF, TDS and Reimbursements
3 Oct 2026 · Learn how to pass payroll journal entries in India: accrual of salary expense, deductions payable, employer contributions, payment entries and reversals, with examples.
- Salary Disbursement in India: NEFT, RTGS, UPI and Bulk Payment Compared
3 Oct 2026 · A guide to salary disbursement methods in India: bank transfer options, wage payment timelines, payslip delivery, record keeping and how to prevent payment failures.
- Payroll Outsourcing in India: When It Makes Sense and What to Ask a Provider
3 Oct 2026 · Should you outsource payroll in India? Compare outsourcing with in-house payroll software, learn the benefits, risks, costs and the questions to ask before choosing a provider.
- Full and Final Settlement (F&F): Process and Timeline Explained
13 Sep 2026 · A practical walkthrough of the Full and Final Settlement process for departing employees — what's included, statutory timelines, and common calculation mistakes.
- Leave Encashment: Calculation Rules and Tax Treatment
13 Sep 2026 · How leave encashment is calculated in India, the tax exemption rules that differ between government and private-sector employees, and common payroll mistakes.
- Shift Allowance: Meaning, Calculation, and Tax Treatment
13 Sep 2026 · What shift allowance is, how companies typically calculate it for night and rotational shifts, and how it is treated for income tax purposes.
- Form 130 (Earlier Form 16) Explained: Part A, Part B, and Common Errors
13 Sep 2026 · A breakdown of Form 130 (Form 16) Part A and Part B, what each section certifies, and the common payroll errors that cause mismatches with Form 168 (Form 26AS) during tax filing.
- Gratuity Calculation & Statutory Math Explained
8 Sep 2026 · Gratuity trips up a lot of first-time payroll runs. Here is the mathematical formula, eligibility thresholds, ceiling limits, and worked spreadsheet examples.
- Internet Allowance: Meaning, Taxability & CTC Structuring
8 Sep 2026 · A practical guide to internet allowance in India — what it covers, how the Income Tax Act treats it, and how HR teams should structure it inside a flexible benefits plan.
- Transport Allowance: Rules, Exemption Limits & Calculation
8 Sep 2026 · Everything payroll teams need to know about transport allowance in India — exemption limits under the Income Tax Act, who qualifies, and how it is calculated in CTC.
- Salary Slip Format in India: What Every Payslip Must Include
8 Sep 2026 · A breakdown of what a compliant Indian salary slip must contain — earnings, deductions, employer details, and the statutory fields auditors check first.
- Books & Periodicals Allowance: Rules and Tax Exemption
8 Sep 2026 · A short guide to books and periodicals allowance — what it covers, the reimbursement process, and how it stays exempt from income tax.