I am geting salary as director in company,can i pay salary to driver and deduct in salary

Ans: Fixed allowance for fuel and driver is fully taxable. If car is fully used for official purpose and amount is reimbursed by employer on submission of proof of actual expenses, it will not be considered as income.

Ans: Understanding Employer Contribution to Provident Fund for Basic Salary Below Rs 15,000
When your basic salary is less than Rs 15,000 per month, there are specific guidelines for employer contributions to the Provident Fund (PF). Let’s delve into the details to understand whether it is correct to deduct Rs 1,800 as the employer’s contribution.

Basics of Provident Fund Contributions
The Provident Fund is a social security scheme for employees. It ensures savings for retirement. Both the employee and employer contribute to the PF. The contributions are usually a percentage of the employee's basic salary plus dearness allowance (DA).

Contribution Rates
Typically, the employee contributes 12% of the basic salary plus DA to the PF. The employer also contributes 12%, but this is split into two parts: 8.33% goes to the Employee Pension Scheme (EPS) and the remaining 3.67% goes to the Employee Provident Fund (EPF).

Specific Case: Basic Salary Below Rs 15,000
If your basic salary is below Rs 15,000, the employer’s contribution to the PF follows a specific structure:

Employee Contribution: 12% of basic salary + DA
Employer Contribution: 12% of basic salary + DA, split between EPF and EPS
Maximum Limit on Employer’s EPS Contribution
For EPS, the employer’s contribution is capped. The maximum salary considered for EPS contribution is Rs 15,000. Thus, 8.33% of Rs 15,000 (which is Rs 1,250) is contributed to EPS. Any amount above this goes to the EPF.

Calculation Example
Let’s assume your basic salary is Rs 12,000 per month.

Employee Contribution: 12% of Rs 12,000 = Rs 1,440
Employer Contribution:
EPS: 8.33% of Rs 12,000 = Rs 999.60 (capped at Rs 1,250 if basic salary is Rs 15,000)
EPF: 3.67% of Rs 12,000 = Rs 440.40
Scenario: Rs 1,800 Employer Contribution
If the employer is contributing Rs 1,800 when your basic salary is less than Rs 15,000, it’s essential to check the distribution between EPS and EPF. It could mean higher contributions towards EPF, which is allowed.

Is Rs 1,800 Deduction Correct?
The correctness depends on how the Rs 1,800 is split:

EPS Contribution: Should be a maximum of 8.33% of Rs 15,000 or Rs 1,250.
EPF Contribution: The remaining amount after deducting the EPS portion from the total 12% of basic salary.
Empathising with Your Concern
Understanding these deductions can be confusing. It’s important to ensure clarity on how your contributions are calculated. Checking your pay slip and the contribution details can help.

Importance of Accurate Deductions
Accurate PF contributions ensure sufficient retirement savings. It also ensures compliance with legal requirements. Any discrepancies can affect your savings and benefits.

Reviewing Your Payslip
Check Basic Salary: Ensure the basic salary mentioned is accurate.
Review Deductions: Verify the PF deductions.
Seek Clarification: If there are discrepancies, discuss with your HR department.
Benefits of PF Contributions
Tax Savings: Both employee and employer contributions qualify for tax benefits.
Retirement Savings: Ensures a corpus for post-retirement life.
Pension: Part of the contribution goes towards pension, providing regular income after retirement.
Analytical Perspective
From an analytical perspective, understanding the PF structure helps in financial planning. Knowing the exact deductions and contributions clarifies your take-home salary and retirement benefits.

Assessment of Employer Contributions
Regularly assessing employer contributions ensures that they align with statutory requirements. This assessment also helps in identifying any errors early, ensuring corrective measures.

Consulting a Certified Financial Planner
A Certified Financial Planner (CFP) can provide detailed insights into your PF contributions. They can also help you understand the impact on your overall financial planning and retirement savings.

Conclusion
To conclude, if your basic salary is less than Rs 15,000, the employer's contribution should align with the statutory guidelines. Rs 1,800 as an employer contribution can be correct, depending on the split between EPS and EPF. Regular review and consultation with a CFP can ensure accurate contributions and optimal retirement savings.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: 01. Your question is not very clear. What I understand is :
You are Getting Salary from a Partnership Firm. You are incurring some expenses on your personal Car maintenance, which is also being depreciated & on your domestic servants also.
You are liable to pay Income Tax on your Salary from the firm, while no deduction would be allowed for Car maintenance & its depreciation etc. How ever you won't be entitle to Standard Deduction from Salary, since your salary income would be taxable under the head "Business or Profession".
Most welcome for any further clarifications. Thanks.

Ans: Salary paid to driver and fuel expenses by employee, reimbursed by employer was never part of income. Said reimbursement was not an income if car is used purely for official purpose and car is owned by employee.