Module Overview
The DRKDS HRMS Payroll India module provides complete India statutory compliance for payroll processing as per Labour Code 2025 and related acts.
Provident Fund (PF)
- EPF @ 12% Employee + 12% Employer
- EPS (8.33% of Employer)
- EDLI contribution
- PF ECR file generation
Employee State Insurance
- Employee @ 0.75%
- Employer @ 3.25%
- ESI wage ceiling ₹21,000
- IP number management
Professional Tax
- State-wise PT slabs
- Monthly/Annual calculation
- PT challan generation
- All states supported
Tax Deducted at Source
- Old vs New Tax Regime
- 80C, 80D deductions
- HRA exemption
- Form 16 generation
Labour Code 2025 Compliance: This module implements wage definition as per Code on Wages (50% basic salary rule), Universal Account Number (UAN), and Aadhaar-based KYC requirements.
Provident Fund (PF)
EPF Contribution Rates (2025)
| Component | Employee | Employer | Total |
|---|
| EPF | 12% | 3.67% | 15.67% |
| EPS (Pension) | - | 8.33% | 8.33% |
| EDLI | - | 0.50% | 0.50% |
| Admin Charges | - | 0.50% | 0.50% |
| Total | 12% | 13% | 25% |
* Calculated on Basic + DA, maximum ₹15,000/month for statutory limit
PF Configuration
Navigate to: HRMS → Payroll India → Configuration → PF Settings
- Enter PF Establishment Code
- Enter PF Office (Regional/Sub-regional)
- Set PF Wage Ceiling (₹15,000 or actual)
- Configure contribution rates
- Set up bank account for PF remittance
- Configure auto-generation settings for ECR
Employee PF Setup
Navigate to: Employee → Statutory Info → PF Details
| Field |
Description |
Mandatory |
| UAN (Universal Account Number) |
12-digit unique PF number |
Yes |
| PF Number |
Member ID under establishment |
Yes |
| Date of Joining PF |
PF membership start date |
Yes |
| PF Wage Type |
On Actual or Ceiling (₹15,000) |
Yes |
| Voluntary PF |
Additional employee contribution |
No |
PF Calculation Example
Employee: Rahul Sharma
Basic Salary: ₹25,000/month
PF Wage: ₹15,000 (Ceiling applied)
Employee PF Contribution:
= ₹15,000 × 12% = ₹1,800
Employer Contribution:
EPF (3.67%): ₹15,000 × 3.67% = ₹550
EPS (8.33%): ₹15,000 × 8.33% = ₹1,250 (max ₹1,250)
EDLI (0.50%): ₹15,000 × 0.50% = ₹75
Admin (0.50%): ₹15,000 × 0.50% = ₹75
Total Employer: ₹550 + ₹1,250 + ₹75 + ₹75 = ₹1,950
ECR File Generation
- Navigate to HRMS → Payroll India → PF → ECR Generation
- Select Month and Year
- Click "Generate ECR"
- System creates ECR in EPFO format
- Download and upload to EPFO portal
- Generate challan after ECR upload
Due Date: PF payment must be made by 15th of following month. Delay attracts 12% p.a. interest and damages.
Employee State Insurance (ESI)
ESI Contribution Rates (2025)
| Contribution | Rate | Wage Ceiling |
|---|
| Employee | 0.75% | ₹21,000/month |
| Employer | 3.25% | ₹21,000/month |
| Total | 4.00% | |
* ESI applicable only if gross wages ≤ ₹21,000/month
ESI Applicability Rules
| Condition |
ESI Status |
| Gross Wages ≤ ₹21,000 |
ESI Applicable - Full contribution |
| Gross Wages > ₹21,000 |
ESI Not Applicable |
| Cross ₹21,000 mid-contribution period |
Continue for rest of contribution period |
| New joiner > ₹21,000 |
Not covered under ESI |
ESI Configuration
Navigate to: HRMS → Payroll India → Configuration → ESI Settings
- Enter ESI Establishment Code
- Set ESI Sub-code (for sub-units)
- Configure contribution rates
- Set ESI wage components (what's included)
- Configure challan generation settings
Employee ESI Setup
| Field |
Description |
| IP Number |
Insured Person number (17 digits) |
| ESI Dispensary |
Dispensary where employee is registered |
| Family Members |
Dependents for ESI benefits |
| ESI Branch Office |
Regional ESIC office |
ESI Calculation Example
Employee: Priya Patel
Gross Wages: ₹18,000/month
ESI Applicable: Yes (Below ₹21,000 ceiling)
Employee Contribution:
= ₹18,000 × 0.75% = ₹135
Employer Contribution:
= ₹18,000 × 3.25% = ₹585
Total ESI: ₹135 + ₹585 = ₹720
Contribution Period:
April to September → Benefits October to March
October to March → Benefits April to September
Professional Tax (PT)
State-wise PT Slabs
Maharashtra
| Monthly Salary | PT Amount |
|---|
| Up to ₹7,500 | Nil |
| ₹7,501 - ₹10,000 | ₹175/month |
| Above ₹10,000 | ₹200/month (₹300 in Feb) |
Karnataka
| Monthly Salary | PT Amount |
|---|
| Up to ₹15,000 | Nil |
| Above ₹15,000 | ₹200/month |
Tamil Nadu
| Half-Yearly Salary | PT Amount |
|---|
| Up to ₹21,000 | Nil |
| ₹21,001 - ₹30,000 | ₹135 |
| ₹30,001 - ₹45,000 | ₹315 |
| ₹45,001 - ₹60,000 | ₹690 |
| ₹60,001 - ₹75,000 | ₹1,025 |
| Above ₹75,000 | ₹1,250 |
Gujarat
| Monthly Salary | PT Amount |
|---|
| Up to ₹5,999 | Nil |
| ₹6,000 - ₹8,999 | ₹80/month |
| ₹9,000 - ₹11,999 | ₹150/month |
| Above ₹12,000 | ₹200/month |
West Bengal
| Monthly Salary | PT Amount |
|---|
| Up to ₹10,000 | Nil |
| ₹10,001 - ₹15,000 | ₹110/month |
| ₹15,001 - ₹25,000 | ₹130/month |
| ₹25,001 - ₹40,000 | ₹150/month |
| Above ₹40,000 | ₹200/month |
PT Configuration
- Navigate to HRMS → Payroll India → Configuration → PT Settings
- Select State
- Configure PT slabs (pre-loaded for major states)
- Set PT Registration Number
- Configure challan generation
Multi-State: If employee works in different state than registered office, deduct PT as per work location state.
Tax Deducted at Source (TDS)
Income Tax Slabs - FY 2025-26
New Tax Regime (Default)
| Income Slab | Tax Rate |
|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 - ₹7,00,000 | 5% |
| ₹7,00,001 - ₹10,00,000 | 10% |
| ₹10,00,001 - ₹12,00,000 | 15% |
| ₹12,00,001 - ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Standard Deduction: ₹75,000 available under new regime
Old Tax Regime (Optional)
| Income Slab | Tax Rate |
|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 - ₹5,00,000 | 5% |
| ₹5,00,001 - ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
+ 4% Health & Education Cess on tax amount
Deductions Available (Old Regime)
| Section | Deduction | Maximum |
|---|
| 80C | PPF, LIC, ELSS, Tuition Fee, PF | ₹1,50,000 |
| 80CCD(1B) | Additional NPS | ₹50,000 |
| 80D | Medical Insurance Self | ₹25,000 |
| 80D | Medical Insurance Parents | ₹50,000 (if senior citizen) |
| 80E | Education Loan Interest | Full amount |
| 80G | Donations | 50%/100% based on org |
| 24(b) | Home Loan Interest | ₹2,00,000 |
| HRA | House Rent Allowance | As per calculation |
Investment Declaration Process
- Navigate to HRMS → My Profile → Tax Declaration
- Select Tax Regime (Old/New)
- Enter investments under each section
- Upload proof documents
- Submit for HR verification
- HR approves declarations
- TDS calculated based on declarations
HRA Exemption Calculation
HRA Exemption = Minimum of:
1. Actual HRA received
2. Rent paid - 10% of Basic
3. 50% of Basic (Metro) or 40% of Basic (Non-Metro)
Example:
Basic: ₹30,000, HRA: ₹15,000, Rent: ₹12,000 (Delhi)
1. Actual HRA = ₹15,000
2. Rent - 10% Basic = ₹12,000 - ₹3,000 = ₹9,000
3. 50% of Basic = ₹15,000
HRA Exemption = ₹9,000 (Minimum)
Taxable HRA = ₹15,000 - ₹9,000 = ₹6,000
Form 16 Generation
- Navigate to HRMS → Payroll India → TDS → Form 16
- Select Financial Year
- Choose employees (all or selective)
- Click "Generate Form 16"
- System creates Part A and Part B
- Download and distribute to employees
Form 16 Due Date: Must be issued by June 15th following the financial year end.
Gratuity
Payment of Gratuity Act
- Applicable: Establishments with 10+ employees
- Eligibility: 5 years of continuous service
- Rate: 15 days wages for every completed year
- Maximum: ₹20,00,000 (tax-free limit)
Gratuity Calculation
Gratuity = (Last Drawn Basic + DA) × 15 × Years of Service / 26
Example:
Last Basic + DA: ₹40,000
Years of Service: 8 years
Gratuity = (₹40,000 × 15 × 8) / 26
= ₹48,00,000 / 26
= ₹1,84,615
Gratuity Configuration
- Navigate to HRMS → Payroll India → Configuration → Gratuity
- Set calculation method (15/26 or 15/30)
- Configure wage components for gratuity
- Set maximum limit
- Configure auto-provisioning in payroll
Monthly Gratuity Provision
Monthly Provision = (Basic + DA) × 15 / (26 × 12)
= (Basic + DA) × 4.81%
Example:
Basic + DA: ₹30,000
Monthly Provision = ₹30,000 × 4.81% = ₹1,443
Tax Treatment: Gratuity up to ₹20 lakhs is tax-free for employees covered under Payment of Gratuity Act.
Labour Welfare Fund (LWF)
State-wise LWF Rates
| State | Employee | Employer | Frequency |
|---|
| Maharashtra | ₹6/6 months | ₹18/6 months | June & December |
| Karnataka | ₹10/year | ₹20/year | January |
| Gujarat | ₹6/6 months | ₹12/6 months | June & December |
| Tamil Nadu | Not applicable | Not applicable | - |
| Delhi | ₹1/month | ₹2/month | Monthly |
| West Bengal | ₹3/month | ₹5/month | Monthly |
LWF Processing
- Navigate to HRMS → Payroll India → LWF → LWF Processing
- Select State and Period
- System calculates contributions
- Generate challan
- Deposit to LWF department
Statutory Compliance Calendar
Monthly Deadlines
| Date | Compliance | Details |
|---|
| 7th | TDS Payment | TDS for previous month (Challan 281) |
| 15th | PF Payment | EPF contribution for previous month |
| 15th | ESI Payment | ESI contribution for previous month |
| 21st | PT Payment | Professional Tax (varies by state) |
| 25th | PF ECR Upload | Electronic Challan cum Return |
Quarterly Deadlines
| Quarter | TDS Return (24Q) | An IT Firm Return |
|---|
| Q1 (Apr-Jun) | July 31 | July 15 |
| Q2 (Jul-Sep) | October 31 | October 15 |
| Q3 (Oct-Dec) | January 31 | January 15 |
| Q4 (Jan-Mar) | May 31 | May 15 |
Annual Deadlines
| Date | Compliance |
|---|
| April 30 | PF Annual Return |
| May 15 | ESI Return (Apr-Sep contribution period) |
| June 15 | Issue Form 16 to employees |
| July 31 | Income Tax Return (non-audit cases) |
| November 15 | ESI Return (Oct-Mar contribution period) |
Penalty for Non-Compliance:
- PF: 12% p.a. interest + damages up to 100%
- ESI: 12% p.a. interest + damages
- TDS: 1.5% per month interest + penalty
Statutory Reports
Available Reports
| Report | Purpose | Frequency |
|---|
| PF ECR | EPFO electronic filing | Monthly |
| PF Challan | Payment challan | Monthly |
| ESI Contribution | ESI payment details | Monthly |
| PT Challan | Professional Tax payment | Monthly |
| Form 24Q | Quarterly TDS return | Quarterly |
| Form 16 | Employee TDS certificate | Annual |
| Form 12BA | Perquisites statement | Annual |
| PF Form 3A | Annual PF statement | Annual |
| PF Form 6A | Annual PF consolidated | Annual |
| Gratuity Provision | Gratuity liability | Monthly |
Generating Reports
- Navigate to HRMS → Payroll India → Reports
- Select Report Type
- Choose Period
- Filter by Branch/Department if needed
- Click "Generate"
- Export to required format (Excel/PDF/Text)
Troubleshooting
Problem: PF not calculating for employee
Solution: Check if UAN is entered, verify PF wage type is set, ensure Basic > 0.
Problem: ESI calculating for high-salary employee
Solution: Check wage ceiling setting, verify gross calculation includes all components.
Problem: TDS calculation mismatch
Solution: Verify tax regime selection, check investment declarations, ensure all income sources are captured.
Problem: ECR file rejected by EPFO
Solution: Verify UAN numbers are valid, check names match Aadhaar, ensure no special characters.