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VOLUME: 6 FEBRUARY 2017

Consultant Review

Magazine, 2017

Top 5 Labour Law Consultants

Silicon India Magazine

Top 25 Global

Outsourcing Companies

Top 10 Indian LPO’s

Conference Asia 2015

Excellence in HR

Information System

Global HR Excellence Award 2013

Organization with

Innovative HR Practices

Establishment Compliance ManagementYour Compliance work-Simplified

Payroll ManagementManage your workforce with ease and precision

Payroll ComplianceMaximize performance through customized payrollcompliance programs

Outsourcing and Temp StaffingFrom Campus to Corporate-Hassle Free Process

Recruitment & Talent ManagementFinding the right fit makes all the difference

Vendor Compliance ManagementCritical aspects of Vendors Compliance Managementfor Risk Free Operations...

IN THIS EDITION

► From the Director’s Desk

► Compliance

- We bring you the latest from the world of compliance

► Budget

- For The Individual Tax Payer

► Budget & GST Conference

► Payroll

- Employee Care – Flexi Pay

► Human Resources

- Simplifying work: 5 key trends that will shape face of HR in 2017

► Karma Konnect

► Humour

RECKONER FOR FEBRUARY 2017

► Annual Return Payment of Bonus

on or before 01.02.17

► Employees Compensation Act

on or before 01.02.17

► Submit Annual Return under Minimum

Wages Act, on or before 01.02.171948

► Payment of Stipend to Apprentices

on or before 10.02.17

► Submit Annual Return under Minimum

Wages Act, on or before 15.02.171936

► Submit PF on or before 15.02.17

► Annual Return Under The Contract Labour

Act, 1970 on or before 15.02.17

► Pay ESIC on or before 21.02.17

► Pay PT on or before 27.02.17

From the Director’s Desk…

We hope the year got off to a promising start. As promised, we have had plenty to keep us going, and ensure we had more than our share of work cut out for us.

To start off with, the month brought in its share of anxiety with the ECR 2.0 creating its share of trouble. Followed closely with an extension granted to filing, and also certain times when the site responded better than others, we were constantly on guard.

The anticipation of the budget and its implications has been another keenly watched movement. We have brought you the most significant highlights that the budget has introduced. We will continue to bring you analyses and interpretations in the comind edition.

We are extremely happy to announce a special event that brings together the most eminent authorities in the world of GST, taxation and Labour Laws. An event that promises the best insights, we look to be able to help build a better understanding of how the GST has impacted HR and compliance, and also how the road ahead looks with regard to labour laws. A detailed overview of the event is contained in the magazine.

Looking forward to more action and eventful moments in the coming months!

Best regards,

Pratik Vaidya

Compliance

In the wake of the upcoming elections, the state of Uttar Pradesh has announced specific dates for each of the regions, where shops and commercial establishments shall remain closed. To view the official notification, along with the dates and regions where the notification shall be effective, you may visit http://comply4hr.com/noti/2016/UPSAE2017Jan30.pdf

Through a special notification released under the ESI Rules, all women who are covered by the ESIC and have a monthly salary of up to Rs. 21,000 now have maternity benefits extended for up to 26 weeks. The official notification can be viewed at http://comply4hr.com/noti/2016/ESICR2017Jan20.pdf

We bring you the latest from the world of compliance

Revised minimum wages for the Central sphere have been announced for various areas of employment. The revised rates come into effect from 19.1.2017, and will be in effect until 31.3.2017. The official notification, along with minimum wages for each sector can be obtained from http://comply4hr.com/noti/2016/MWA2017Jan31.pdf

Compliance

The EPF Employees’ Enrolment Campaign

The government is currently running an employee enrolment campaign which is an instrument to

help employers declare details of employees who were entitled to PF membership but were not

enrolled. The key features of this campaign are as follows:

Dates of eligibility: This is applicable for employees who were entitled between 1.4.2009 and

31.12.2016

Qualification: This is applicable for members who are still alive, who were entitled within the said

period, and who can furnish Form 11 to the employer. The employee must be traceable even if

having left the organisation. A valid thumb impression is required.

Incentives to Employer: Employees’ share not deducted shall be waived. Damages to be paid by

employer at the rate of Rs. 1 per annum. No administrative charges shall be levied on the employer

in declaring the information.

Time Limit: The declaration shall be made between 1.1.2017 and 31.3.2017, to be made by the

employer. Remittances to be made within 15 days of declaration. Failure to make remittance within

the period will attract dues, damages and interest. Moreover, such declaration shall be deemed to

have not been made.

Restrictions: There are no restrictions to the number of declarations that can be made by the

employer.

Facilities: The declaration can be made online, but the documentation must be filed

simultaneously.

Form 11 and contribution: It is mandatory for the employer to have Form 11 submitted

by the employee, duly filled and signed. Contributions shall be made for every month until

December 2016, with simple interest at 12 percent and damages at Rs.1 per annum paid

through separate ECR.

The complete information and official document detailing all FAQ’s is available for viewing at

http://comply4hr.com/noti/2016/EPFS2017Jan4.pdf

Budget

Budget 2017**A) MACRO:*- Minister pats himself on the back for controlling inflation, high growth and war on black money- Inflation has dropped from 6% to 3.4%- Current account deficit declined from 1% to 0.3% of GDP in the first half of the year- Forex reserves at $361Bn (12 months of imports)- India is 6th largest manufacturing country in the world now.*B) Indirect Tax*: No change in rates , as GST is to be implemented. *C)Income Tax*: i) Individual Tax Slab2.5 lacs - 05 Lacs 5%05 lacs - 10 Lacs 20%10 lacs - 15 Lacs 30%ii) 12500 rebate for all above income of Rs 500000iii) Sec 40A(3) to be amended. Limit to be 10000iv) Capital expenditure of more than 10000 to be in other than cashv) MAT credit to be carried forward for 15 yearsvi) Corporate tax for companies having turnover up to 50 crores reduced to 25 percentvii) One page income tax return for income below 5 Lacs.viii) Company with turnover below 50 cr, income tax rate reduced to 25 % from 30%.ix) LTCG holding period for land building reduced to 2 yearsx) Books to be compulsory for turnover exceeding Rs. 25 lakhsxi) Presumptive income: TO Upto 2 crore 6% tax rate for non cash basexii) Scrutiny cases to be completed by September as against December now*D) Others*: i) Law for confiscation of loan defaulters to be made.ii) No service charges on ticket booking from IRCTC

► Decreased tax rates from 10 to 5 percent

for income between 2.5 and 5 lakhs

► Holding period for immovable property

to be considered long term reduced to

2 years from 3 years

► Lower payouts on long term capital gains

► Reinvestment of capital gains in notified

redeemable bonds to attract tax exemption

► Single page returns for those in income

group upto Rs. 5 lakh

FOR THE INDIVIDUAL TAX PAYER

Gains

► Tax rebate for those with income

upto Rs. 3.5 lakh reduced from

Rs. 5000 to Rs. 2500

► Income group between Rs. 50 lakh and

Rs. 1 crore to attract 10 percent surcharge

► Penalty of Rs. 5000 for those who fail to

file returns for 2017-18 by 31st December

2018, and Rs. 10000 if filed later.

► Revision of tax returns must be made

within one year(as opposed to the earlier

2 years) before the completion of

assessment of the end of the financial year

Losse

Budget & GST Conference

Conference Overview:

Much has been impacted in the business scenario owing to several variables, the most impacting of

them being the introduction of the Goods and Services Tax (GST) and the recent demonetization.

While the impact has been greatest in the unorganized sector, there is no area of business that has

remained unaffected.

While HR seems to be amomg the functions that has been least affected, it has required

realignment and restructuring, and has been especially critical for companies paying tax for the

first time.

We present you an indepth analysis of GST its impact on both direct and indirect tax, the tax

structure, and how it influences both HR and payroll. Abhishek Rastogi, author and expert on

GST will present his views, while Mr. Rajkumar Adukia will throw light on its impact on compliance

and labour law.

Industry knowledge on the impact of taxation on payroll, and the nuances of direct taxation and

payroll compliance will be shared in the broader purview of the budget and how it will shape payroll.

This is a great opportunity to not just acquaint with some of the most impacting drivers of our

business, but also a chance to gain the perspective of leaders who have grown top companies.

The interactive session concludes with a panel discussion including commissioners of PF, ESI,

Labour and Labour Welfare will allow you insights and forecasts in the world of labour law and

compliance, and help us keep abreast with the changing HR scenario

Who should attend?

HR Heads, Payroll Heads, Finance Heads, Compliance Heads, Operation Heads.

AGENDA

Timing Topic

8:00 AM – 8:30 AM Registration

8:00 AM – 8:45 AM Opening Address

8:45 AM – 9:20 AM Key Note Address: Impact of Budget and GST Implementation

Abhishek A Rastogi; Partner, Khaitan & Co; ►

Author and tax expert.

9:20 AM – 10:10 AM Panel Discussion: Impact of Changes in Labour Laws

Senior officials from PF, ESIC, Labour department►

10:10 AM – 10:20 AM Networking Break

10:20 AM – 11:05 AM Session on Taxation Dr. Rajkumar Adukia, Senior Partner, ►

Adukia & Associates; Ex Chairman, Institute of Chartered Accountants of India

11:05 AM – 11:15 AM Closing Session followed by Breakfast

Budget & GST Conference

Payroll

Employee Care – Flexi Pay

Times are changing with evolving pace in the field of remuneration. Gone are the days in Indian market, where an employee used to be satisfied with stagnant fixed salary and once a year petty “diwali” bonus. Keeping in line with international trends, Indian companies too are changing their remuneration structures to suit employee needs in today’s dynamic market place.

Today employees want salary package to offer customization and flexibility in terms of personal finance, taxation, working hours, productivity / revenue basis, Fixed & Variable pay, own performance, Target achievements etc.

Following are the best practices in the industry with regards to flexi-pay options:

1. Customized pay structure: Today organizations offer employees flexibility to decide how much salary they want to receive under various salary heads. For example, many international Banks offers its employees flexible arrangement of salary under various heads like basic pay, HRA, Medi claim, DA, travel conveyance etc out of total given Annual Guaranteed Cash (AGC).Other factor being reimbursement of certain expenses like communicatuin, travel, business promotion etc which are generally incurred by senior profiles. Earning agains these heads are considered as business expense hence provide tax exemptions at certain level and limits. Flexibility is provided depending upon employee choice.

2. Working shifts:Certain professions are such where employees are supposing to work during night or odd hours. In such profiles, companies offer attractive salary packages and additional facilities to make sure employees feel cared for. They are generally offered better salary as compared to regular timing ones.

3. Revenue / productivity based:This categorization is generally applicable to sales based profiles that are given specific revenue target to be achieved. Such roles offer potential to make high amount of incentives / variable salary over and above their fixed salary. It keeps employee motivated to achieve far higher revenues for the organization.

4. Permanent or contract basisUnder this category, depending upon employee preference, they can be either being offered salary under permanent job or contract job. Usually, permanent job involves providing employees other facilities like HRA, health cover, life insurance cover and other special benefits. While contract basis employees are not interested in receiving special facilities rather they prefer more in hand salary.

5.Employee Stock Options (ESOPs)This is the new age mantra adopted by companies to motivate employees to give their very best and at the same time feel they are part of the business. Under ESOPs, companies allocate certain percentage of shares of the organizations to their employee depending upon their vintage & grade in system. In this way, they are made partners in the business where if the company does well and its stock prices goes up in the market, value of ESOPs will also go up tremendously thereby providing extra benefit to employees. IT companies are one of the earliest and best examples of efficacy of ESOPs which has helped create millionaires in the company in last 20-25 years.

Above categorization briefly depicts evolving methods of compensation in the markets and need to keep oneself abreast with dynamic trends to make sure your biggest asset employees remain satisfied with the organization.

Human Resources

Simplifying work: 5 key trends that will shape face of HR in 2017

Among the few corporate functions that have undergone a massive makeover in the past decade is human resources, or HR as most of us know it. It has been a classic journey- and, no, we are not referring to the journey from the staffroom to the boardroom. HR has changed in the way its customers, i.e. the employees, experience it, and the demands and expectations they are placing on it every single day. From the times when people used to think about HR only on pay-days, to today when HR plays a major role right from day 1 to the last, it has been a major leap. The year 2017 is not going to be any different. Here are five key trends which are going to shape the face of HR this year and beyond.

India HRified: India, in the past few years, has become the hub of a large number of small and medium businesses, thanks to the recent government initiatives. Today, there are about 63 million small and medium business enterprises in the country. An interesting trend that 2017 will see is these business power centres will become the HR power centres as well. HR practices in their entirety will not be led by Fortune 100s or 500s, but by these new-age organisations who are digital natives in the space of business transformation.

End of the relationship-digital adoption and “collar” of employees: Traditionally, HR practices and their maturity have been governed by whether the workforce is white-collared or blue-collared. Though the digitisation of HR started the same way, the year 2017 is going to change it. The journey of new-age HR will not be restricted by industry boundaries. Be it traditional enterprises, those in a manufacturing set-up or new ones that have a distributed non-traditional workforce, everyone would want to embark on the journey of cloud and mobile.

New job description for HR department: As the HR department and the demands people have from this function change, HR’s job description will no longer remain the same. This year will see adoption of new-age technology systems, mobile apps and chatbots. HR is expected to move out of the web of transactions and start working towards business and technology enablement (we might see HR professionals employed for training chatbots so that employees get an unparalleled experience).

Jobs and gigs: Human potential of India has gained a lot of interest in the last couple of years. This year will see an equal focus on India’s employment story. There will be two major trends that will distinctly come out. One is the move from the unorganised to the organised segment. Almost 90% of India’s workforce belongs to the unorganised segment and there over 44 national and 100 state-level Acts which often discourage the move of this segment of workforce to the formal segment. With the kind of labour law amendments the government is trying to bring, digitisation of government processes and initiatives like demonetisation will put a lot of push in this direction. The second interesting trend is the move of the economy from jobs to gigs. Whether we like it or not, uberisation of jobs is just round the corner, and once it hits India, the job market will no longer be the same.

RPO rises: As the job market of the country gets more dynamic and complex, organisations would want a partner to help them meet their talent needs. RPO or recruitment process outsourcing market in India will grow at the rate of over 20%, and it will be the fastest growing RPO market globally. The rise of RPO will put a lot of focus on reducing the hassles and manual transactions from the recruitment process and also on providing a memorable candidate experience. Though in bits and pieces, many forward looking organisations have already started this journey, this year will see widespread adoption of the practice.

At Karma, we have always focussed on making work and play equally

fun. Which is why we always urge everyone to let Karma finish the job

for them.

This last month has witnessed great engagement among our Karma

team – whether at the day trip to Esselworld, or with a movie date to

watch Dangal. The year promises many more such fun avenues to help

bring us, and keep us together.

Balloon debate

A man in a hot air balloon realised he was lost. He reduced altitude

and spotted a woman below. He descended a bit more and shouted:

“Excuse me, can you help me? I promised a friend I would meet him

an hour ago, but I don’t know where I am.”

The woman below replied: “You are in a hot air balloon hovering

approximately 30 feet above the ground. You are 51º21,32.87

degrees north latitude and 0º21,32.87 degrees west longitude.”

“You must be an IT specialist,” said the balloonist.

” I am,” replied the woman. “How did you know?”

“Well,” answered the balloonist, “everything you told me is

technically correct, but I have no idea what to make of your

information, and the fact is I am still lost.

Frankly, you’ve not been much help so far.”

The woman below responded: “You must be in HR.”

“I am, “replied the balloonist. “But how did you know?”

“Well,” said the woman, “you don’t know where you are or where you

are going. You have risen to where you are due to a large quantity

of hot air. You made a promise, which you have no idea how to keep,

and you expect people beneath you to solve your problems. The fact

is you are in exactly the same position you were in before we met,

but now, somehow, it’s my fault.”