It is known that the scope of statutory compliance in an organization is limited to deducting taxes from employees' salary and paying it to the government. While it is not the only thing it does, it also ensures that the organization provides adequate benefits to employees as well.
firstly we learn about tax compliance and its importance in business. This needs to be further split into four parts: Withholding, Contributing, Remittance & Reporting.
Withholding: Every employer should follow certain tax rules as mandated by the respective agencies of the government in India, employee salaries are deducted towards Income tax, Provident fund, ESI, Professional Tax, and Labour Welfare Fund.
Contributing: Those above-mentioned deductions are made from the employees for their welfare. Each of these compliances is again governed by a set of rules and formulas.
Remittance: Once deductions are done from the employees for the month, the employer has to make contributions and arrangements to remit them to the respective departments of the government. There are specific timelines & formats by when they need to be remitted and Most of the remittances can now be done online through the banking system.
Reporting: After deductions are made from the employees and remitted to the respective department in government, it is time for filling ‘Returns’. It is a detailed report submitted by an organization to the respective government departments accompanying the remittances. It contains information on income paid to its employees and the taxes deducted. Therefore the report should match the remittance made. Again, the respective returns are to be submitted as per specified timelines and formats.
Assessments & Internal Audits:
Authorized inspectors or enforcement officers of government departments are required to audit the remittances and returns for each completed year in order to check for any violations.
Why WIN HRM Payroll?
Payroll and Statutory compliance in hr is a specialized subject and many prefer it to be managed by professionals due to constant changes in rules and also keeping in mind the adverse impacts of non-compliance. winhrmpayroll software helps you to manage the entire process seamlessly. our hr software support the computation of the right taxes, preparation of accurate reports/challans and link the system to government portals for remittances and filing of returns as well.