Salary Breakup - Medical Allowance

My queryis that we are running a Business(Trading of Electrical goods)Electrical Shop we are registered under PunjabVat Act2005 & Mantaining our books computerised which are audited by Chartted Accountanat & making our Balance Sheet & filling our I.Tax Returns .Only Two employess are working with us & we are paying them salary Rs.15000 to 16000(P.M) in cash.we have not any PF,ESI Registration.Can we pay Salary By Cheque Amt to Rs26000(PM) withouht deducting TDS Etc as per Calculated Under
Basic+Da+Hra+Conveyence Allowance+Medical Allowance Etc
E mail-nk96093@gmail.com

Hi NK
The breakup of salary as per [Basic+Da+HRA+Conveyence Allowance+Medical Allowance Etc) is always an welcome feature.
But you have to suggest to your management to enrol for PF & ESI. The advantages here are in case of any accidents during the course of work ESI provides necessary support like medicine & leave benefits. Monthy ESI benefit can be obtained for an employees self and their family.
About PF is concerned is paid on Basic +DA except for the workers drawing minimum wages it will be 100%.In case of higher salary given to an employee. Basic + DA can be restricted to Rs. 6500/- or less which ever is applicable as the case my be, wherein you will be paying a maximum amount of RS. 6500x12=Rs. 780/- pm will be deducted from the employee and equal amount of contribution form the management.
Thanks

Dear Experts,
If an employee works on over time, then how we need to compensate the employee. I have 3 options pl correct me which option is correct as per legal.
Option 1 - Paying Double amount without payring PF for OT.
Option 2 - Paying Normal amount for OT with PF.
Option 3 - Paying Double amount with PF for OT.
Thanks.
Sravya