As we have stepped into the next financial year i.e., 2018-2019. It is very much important to know the latest updates that are applicable to this financial year.
The 3% Education Cess from the previous year has been replaced with a 4%.
What is the Conveyance Allowance?
It also called as Transport Allowance is a type of allowance offered to employees of an organization to compensate for their travel from residence to and from respective workplace location. Allowances are generally offered to employees on top of their basic salary component and may or may not be taxable as per the Income Tax Act.
Till last financial year, up to INR 1600 per month was considered as non-taxable. However, now it is completely taxable income, irrespective of the amount.
What is the Employees Provident Fund?
It is a saving scheme that is offered to Indian workers as well as international workers through the EPFO of India. The scheme allows the accumulation of funds as well as accrual of interest on the accumulated funds. The funds thus collected are made of contributions partly from employees and partly from their employers.
The Pradhan Mantri Rojgar Protsahan Yojana(PMRPY) Plan Scheme has been designed to incentivize employers for the generation of new employment, where the Government of India will be paying the 8.33% EPS contribution of the employer for the new employment. This scheme has a dual benefit, where, on the one hand, the employer is incentivized for increasing the employment base of workers in the establishment, and on the other hand, a large number of workers will find jobs in such establishments. A direct benefit is that these workers will have access to social security benefits of the organized sector.
- Employer contributing 12% of the basic wages of the newly added employee after the date of the registration (whether employed directly or through a contractor) towards the provident fund shall be fully reimbursed by the Government for three years, subject to the following conditions:
- Applicable for newly added employee’s, after the date of registration.
- Salary of the newly added employee’s, shall be less than or up to Rs. 15,000.
- Employees already covered under the scheme will be updated to 12% from 8.33% for the remaining duration of the first three years.
- Contribution from women employees towards their provident fund shall be 8% of her basic wages instead of 12%, for three years.
- However, the employer’s contribution would still be 12% of her basic wages towards EPF contribution and shall subject to full reimbursement by the Government as proposed in Budget 2018.
It should, however, be noted that not all of the employer’s share moves into the EPF kitty. Out of the employer’s contribution, 8.33% will be diverted to the Employees’ Pension Scheme, but it is calculated on Rs 15,000. So, for every employee with basic pay equal to Rs 15,000 or more, the diversion is Rs 1,250 each month into EPS. If the basic pay is less than Rs 15000 then 8.33% of that full amount will go into EPS. The balance will be retained in the EPF scheme. On retirement, the employee will get the full share plus the balance of Employer’s share retained to his credit in EPF account.