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Ravi (Service)     24 July 2009

Legal Opinion

Please  advice in the following matters:


1)       Our current contractors are following 2 different ways of calculating salaries of their staff:

a)  Basic                                              X  No of Days of Work                           

    No of days in particular month


b) Basic X No of Days of Work



Both the group of contractors claim they are using the correct way of calculation. Contractors dividing basic by 30/31 days state they do so to include & pay for off days ie 26 working days + 4/5 off days. Contractors dividing basic by 26 state that their payment is always more than the other group on account of the divisibility factor and as such their employees do not loose pay for off days if they are absent, ie 26 days include payment for off days.

QUERY: Request you to kindly let us know which the right method to be followed?



2) As per Professional Tax Act, due dates for payment of Profession Tax and for filing the returns in Maharashtra is as given below:

Annual Profession Tax Liability <    Rs. 5000                           - Annual Return.
Annual Profession Tax Liability >= Rs. 5000 but < Rs. 20000      - Quarterly Returns.
Annual Profession Tax Liability >= Rs. 20000                           - Monthly Returns.

Few of our contractors are insisting for Quarterly payment as they have 4-5 employees working for us and the Annual Professional Tax payable is less than 20,000/-

QUERY: These contractors have contracts at other locations also. When we consider Annual Profession Tax Liability, should it be limited to GTI only or the Act considers the overall liability including other establishment as well? Should we accept such Quarterly Returns?



2)     As per MLWF Act, Fines recovered by employees are supposed to be paid to the MLWF authorities.

QUERY : Incase an employee has damaged a company property & a fine is imposed for the same. Do we still need to pay it to the authorities when the loss is done to company property?



 2 Replies

mahesh pandey (Vice President)     27 July 2009

Salary sud be calculated on the basis of month considering 26 days & not 30/31 days , hence second option is corrrect.

If P.Tax is >20000 then quarterly return has 2 be accepted.


mahesh pandey

Saravana Rajan   30 July 2009


If your case is related to legal minimum wages, pl note if dividing by 30 or 31 days, the minimum wages should not fall below the stipulated wages.

But, legally speaking the wages should be divided by 26.

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