Why Statutory Compliance Matters in India
India's labour law framework is one of the most complex in the world — spanning central legislation, state-level acts, and industry-specific regulations. Non-compliance can result in heavy penalties, prosecution of directors, and reputational damage. For foreign companies hiring in India, understanding these obligations is non-negotiable.
This checklist covers the key statutory requirements every employer in India must fulfil.
1. Employees' Provident Fund (EPF)
Governing Act: Employees' Provident Funds and Miscellaneous Provisions Act, 1952
Applicability: Establishments with 20 or more employees
- Employee contribution: 12% of basic salary + DA
- Employer contribution: 12% (8.33% to EPS, 3.67% to EPF)
- Monthly filing deadline: 15th of the following month
- Annual return: Form 3A and 6A
Even if your headcount is below 20, voluntary registration is possible and often advisable for attracting talent.
2. Employees' State Insurance (ESI)
Governing Act: Employees' State Insurance Act, 1948
Applicability: Establishments with 10 or more employees; employees earning up to ₹21,000/month
- Employee contribution: 0.75% of gross salary
- Employer contribution: 3.25% of gross salary
- Monthly filing deadline: 15th of the following month
- Provides medical, maternity, disability, and dependent benefits
3. Professional Tax (PT)
Governing Act: State-level legislation (varies by state)
Applicability: Applicable in most states; not applicable in some (e.g., Rajasthan, UP)
- Deducted from employee salary monthly
- Maximum ₹2,500 per year per employee
- Employer must obtain PT registration in each applicable state
- Filing frequency varies by state (monthly/quarterly/annually)
4. Tax Deducted at Source (TDS)
Governing Act: Income Tax Act, 1961 — Section 192
Applicability: All employers paying salary income
- Deduct TDS based on employee's estimated annual income and applicable tax slab
- Deposit by 7th of the following month (except March: 30th April)
- Quarterly TDS returns: Form 24Q
- Issue Form 16 to employees annually by 15th June
- New tax regime (default from FY 2024-25) vs. old regime — employees must declare their choice
5. Gratuity
Governing Act: Payment of Gratuity Act, 1972
Applicability: Establishments with 10 or more employees; employees completing 5 years of continuous service
- Formula: (Last drawn salary × 15 × years of service) / 26
- Maximum gratuity: ₹20 lakh (tax-exempt)
- Payable within 30 days of separation
- Employers should maintain a gratuity fund or take group gratuity insurance
6. Shops & Establishments Act
Governing Act: State-level legislation
Applicability: All commercial establishments
- Registration required within 30 days of commencement of business
- Governs working hours, overtime, leave, holidays, and termination
- Annual renewal required in most states
- Each state has its own rules — Delhi, Maharashtra, Karnataka, Tamil Nadu all differ
7. Labour Welfare Fund (LWF)
Applicability: State-specific; applicable in states like Maharashtra, Karnataka, Gujarat, Tamil Nadu
- Small contribution deducted from employee salary (₹6–₹36 depending on state)
- Employer contributes a matching or higher amount
- Frequency: monthly, half-yearly, or annually depending on state
8. Maternity Benefit
Governing Act: Maternity Benefit Act, 1961 (amended 2017)
- 26 weeks of paid maternity leave for first two children
- 12 weeks for third child onwards
- Mandatory crèche facility for establishments with 50+ employees
- Work-from-home option for eligible employees
9. The Four Labour Codes (Upcoming)
India has consolidated 29 central labour laws into four codes. While implementation timelines vary by state, employers should prepare for:
| Code | Replaces | Key Change |
|---|---|---|
| Code on Wages | 4 wage laws | Uniform definition of wages; floor wage |
| Industrial Relations Code | 3 IR laws | Easier hire-and-fire for 300+ employee firms |
| Social Security Code | 9 SS laws | Gig worker coverage; ESIC/EPF changes |
| OSH Code | 13 safety laws | Unified safety standards; annual health check |
Compliance Calendar Summary
| Obligation | Frequency | Deadline |
|---|---|---|
| EPF Deposit | Monthly | 15th of next month |
| ESI Deposit | Monthly | 15th of next month |
| TDS Deposit | Monthly | 7th of next month |
| TDS Return (24Q) | Quarterly | 31st of month after quarter |
| Professional Tax | Monthly/Quarterly | State-specific |
| Form 16 Issue | Annual | 15th June |
| EPF Annual Return | Annual | 30th April |
How LawSync Keeps You Compliant
Managing India's statutory compliance landscape in-house is a full-time job. LawSync's EOR and payroll services handle every obligation on this checklist — so you never miss a deadline, face a penalty, or worry about a compliance audit.
Talk to our compliance team to learn how we can take this burden off your plate.