Rehire of retired employee on contract basis basis deducting TDS under sec 192b

Dear Jayanta,

You have not followed my last post properly. Your question is under which rule or circular you will deduct EPF for one employee who has attained the age of 58 years. Why have you restricted yourself to 58 years? There are several organizations in India where employees retire from the organization's services after reaching the age of 60 years. PF is deducted and deposited, but there is no deposition in the EPS account.

The PF & Misc. Act does not state anywhere that there will be no PF deduction after reaching the age of 58; rather, it is mentioned for EPS. Therefore, no circular or rule is required to deduct PF after reaching the age of 58 or older. It is a common confusion for many people that 58 years is the retirement age according to the PF & Misc. Act. This is a misconception.

Only EPS contribution will cease after reaching the age of 58. Therefore, it is perfectly fine to continue as a PF member after turning 58 if the employee is not an excluded employee according to the PF & Misc. Act.

Thanks & Regards,

S K Bandyopadhyay (WB, Howrah) CEO USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To Strive towards excellence with effort and integrity http://www.usdhrs.in

Dear Sir,

If any employee joins after 58 years, then we can keep him on parole or have to keep him as a consultant. If kept on parole, what will the compliance be deducted? Please guide me.

Regards,
Amod

Dear Sir,

What should be the headings on the payslip for tax benefits?

Regards,

Amod

Dear Sir,

If the owner of the company draws a salary, what compliances are required? Please suggest to me.

Amod Kumar Singh

Dear Sir,

What should be the headings on the payslip for tax benefits?

Regards,

Amod Kumar Singh

Amod Kumar Singh, you can engage a person aged more than 58 as a consultant. But what is the meaning of keeping him as a consultant? A consultant cannot be 'employed' like a regular employee. He cannot be required to come to your office every day at 9 am and remain there till 5:50 or 6 pm. You cannot ask him to take prior permission to take a leave, and you cannot ask him to wear a uniform that all others are wearing. A consultant should be one who is giving advice to management and not merely to workers. If your intention is to keep him away from the operation of labor laws, you are wrong. If he is expected to work on a regular manner, with overtime engagement, taking leave after approval, then he will fall under the definition of an employee under any labor legislation. He should be given his rights conferred under various laws applicable.

The second question is relating to the head of account under which the remuneration payable to such persons should be accounted. It should be accounted under salary only. If he is a technical or managerial consultant who will come occasionally to advise your team members on matters connected with his line of activity, then you can account it under "professional fees." If salary, the deduction of TDS should be as per section 194J. But if he is an employee, obviously, his tax deduction at source should be as per section 192.

An owner or a director of a company form of establishment receiving a salary from the organization shall be covered by all labor laws applicable subject to the wage ceiling as provided under each Act. As such, if the Director's salary does not exceed Rs 21,000, he should be covered under ESI. If he is an existing member of EPF, then he should be covered under EPF also. If he leaves after a service of five years, he should be paid gratuity also. However, the proprietor of a sole proprietorship and partner of a partnership firm are not employees, I understand.