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Allowances and Minmum Wage Act

Allowances and Minmum Wage Act

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Published by jinujith

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Categories:Types, Business/Law
Published by: jinujith on Sep 28, 2011
Copyright:Attribution Non-commercial


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In India,
Dearness allowance
(D.A.) is part of a person's salary.D.A. is calculated as a percent of the basic salary. This amount is then added to the basic salary along with houserent allowance to get the total salary. Rates vary as per rural/urban areas etc.Pensioners and the family pensioners are granted D.A. against the price rise. During thereemployment under Central or State Government, Government undertaking, Autonomousbody or Local Body, they are not eligible to draw D.A., in which case D.A. is allowed inaddition to fixed pay or time scale. In other cases of reemployment D.A. is allowed subject tothe limit of emoluments last drawn. D.A. is not allowed while the pensioner stays abroad andalso in case of employees absorbed in public undertaking or bodies. If the pensioner stayedabroad without reemployment, he shall be eligible to draw D.A. on pension
The dearness allowance is a part of the total compensation a person receives for having performedhis or her job. For example, workers in India might have a base salary or pension, along with anallowance for housing and the dearness allowance. D.A. is a percentage of the original salary. Thepercentage is reviewed and may be changed on a six-month cycle.One explanation for D.A., according to work guidelines, is that the Dearness Allowance is provided tohelp against rise in prices for those on pension. This allowance may also be provided to familymembers receiving benefits from
a worker’s pension. For example, a central government order might
change the Dearness Allowance by 6 percent foremployees of the main branch of government, due tonew information about living expenses and price increases. The amount might be paid in a lumpsum at some point to bring the overall pension and allowances up to what they should be.There are also times when a new level of Dearness Allowance might be established along withhousing and transportation allowances. This generally occurs when the overall pay schedule isrevised. Base salary levels are reported separate from the various allowances. In India the D.A. has ahistory dating back to World War II. At that time, many of the lower-paid employees received D.A.based on their wages or salaries. Many changes to Dearness Allowance and its computations haveoccurred over the last 60 years, according to both private and government studies.
Travel Allowance
 The purpose of the policy is to provide staff members with an allowanceto be used by the staff member to defray the costs of running his or herprivate motor vehicle which will be required to be used by him or herfrom time to time for UCT-related business.
Eligibility and Rules
 All senior, permanent, full-time staff members whose cost ofemployment is at or above a specified level and whose position or postis of such a nature that their private motor vehicle needs to be used bythem for UCT-related business from time to time, are eligible toparticipate. Details regarding eligibility are available from the HumanResources Department.
(HRA) is generally paid as component of salary package. This allowance is given by anemployer to an employee to meet the cost of renting which is increased verymuch..order for hra the following condition should be meet.1. Rental House2. Not owned by you or your spouse.3. Rent Slips
1. Exception:-
Minimum of the following three is exempt:-Actual HRA received- Rent paid minus 10% of Salary- 50% of salary if you live in Metros, otherwise 40% of Salary
ideal rent amount for the
you need to submit to your employer. Follow the
simple formula:
Ideal Rent = HRA + 10% of Salary
3. Stay with parents:-
 Yes you can claim the exception but if the lanlord is spouse it is not advisable to claimthe exception.
Own a property but living on rent;
 if you have a owned property in differ city and a rented house in differ city both exceptioncan be claimed but the owned property shouldnt be rented.but if you have owned and rented in same city it's normally couldnt be claimed. but inmetros yoyu can prove the distance of the office and owned hose and then only you canclaimed
 It is a sum paid to defray special expenses entailed by thenature of employment and as such this amount does notamount to wages.(In lieu of old instructions issued vide Memo No.Ins.III/2/1/65dt. 8.2.1967)SUSPENSION ALLOWANCE/SUBSISTENCE ALLOWANCEDuring the suspension period the employee is not allowed toactually work and he is not given full remuneration but thepermissible subsistence allowance is paid to the employee byway of remuneration for remaining attached to the services of the employer as per the relevant service regulations governinghis contract of service, therefore, the subsistence allowance ispart of wage as defined under Sec.2(22) of the ESI Act andconsequently on the amount of subsistence allowance paid tothe suspended employee, contribution is payable.Supreme Court has also held in the case of RD, ESICVs.M/s.Popular Automobiles etc.in its judgement dt. 29.9.97 in
Civil appeal no.3850 of 1993 that ‘suspension/subsistence
allowance is wage and contribution is payable under Sec.2(22)
on the said amount’.
 (In lieu of earlier instructions were issued vide Memo No.3(2)-1/67 dt. 3.6.67 & letter No.Ins.III(2)-2/71 dt. 10.8.1971)

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