The Central Board of Direct Taxes (CBDT) vide a notification dated 7th July 2021 publishes the Income tax Amendment (19th Amendment), Rules, 2021 which inserts a new Rule 8AC to the Income-tax Rules,1962 dealing with… Read More
Intent of law
- Industrial Employment (Standing Orders) Act 1946
- Apprentices Act 1961
- Industrial Dispute Act 1947
- Payment of wages Act 1936
- Minimum Wages Act 1948
- Factories Act 1948
- Maternity Benefit Act 1961
- Payment of Bonus Act 1965
- Equal Remuneration Act 1976
- POSH Act 2013
- The Contract Labour (Regulation and Abolition) Act, 1970
- Payment of Gratuity Act, 1972
- Professional Tax Act
Standing order is an instruction of the rules and condition of the employment to promote the fair industrial practice. This Industrial Worker’s Standing Orders Act is enacted to draw uniform standing orders for all employees in respect of their working relationship such as classification of workmen, shift working, attendance, termination, suspension of employees etc. It helps in ensuring that the terms and condition of employment are known to each employee and thus to minimize exploitation of workers and employers. This Act provides for the conditions for which standing orders to be made and approval of such standing order by prescribed Authority.
Apprentices Act enacted to regulate apprentices training. Apprenticeship training is a course of training in any industry or establishment which includes basic training (theoretical instructions) and practical i.e. on the job training at actual work place. It enables apprentices to learn more about their field work and thus become skilled workers which helps them in getting better job or self-employment. Apprentices also get stipend at the prescribed rates during the training. This Act provides for qualifications of apprentice, apprenticeship contract, health-safety and welfare of apprentice, duties of employer and apprentice, authorities as well as payment to apprentice.
Industrial dispute is the dispute between employer and employee or employee and employee in relation to employment or non-employment such as low wage, poor working condition, dismissal etc. When industrial dispute occurs, the management of the industry and the employees try to pressurize each other. In such a situation, the management may take recourse of lock out where employees involve in strike, picketing etc. So, the Industrial Dispute Act is enacted to investigation and settlement of industrial disputes. This Act aims at proper adjustment of labour class and capital class to maintain industrial harmony. Apart from that, the Act provides for prior permission of appropriate Government for laying off or retrenching the workers or closing down, payment of compensation to the workman in case of closure or lay off or retrenchment, unfair labour practices on part of an employer or a trade union or workers and their consequences.
The Payment of Wages Act 1936 is enacted to protect the employee’s rights from exploitation of the employer. The main objective of the Act is to regular and timely payment of wages without any unnecessary delay and to prevent unauthorized deductions from the wages. This Act restricts the employer from imposing fine without giving an opportunity to the employee to show cause against the fine. Other provisions of this Act are fixation of wage period by employer, restricts payment of wages in kind, restricts unauthorized deduction from wage. However, statutory deduction such as contribution towards PF, ESI and deductions for absence from duty, recovery of advances, loans etc are allowed by this Act.
Minimum wages Act has been enacted to secure welfare of the worker by fixing minimum rate of wage for employment. The main purpose of the minimum wage is to prevent exploitation of labour class in the hand of capitalist class and to preserve his efficiency as worker. Thus, base level of pay is fixed as per the Minimum Wages Act and employers should not pay less than the base level wage to his employees. For some specified types of employment, the central government is responsible to fix the minimum wage rate and for other areas of employment, the state government establishes the minimum wage. The wage rate may be fixed daily, hourly, or even monthly. However, in fixing minimum wage, Government always stays concerned about the rates of wages depending upon market situation, demand and supply, productivity, education , medical requirements and other amenities because employee’s standard of living is connected with the amount of remuneration they get.
Whatever rules and regulations to be followed in a factory are mentioned in the Factories Act. The Factories Act is enacted to regulate working condition in the factory which is appropriate and beneficial for the factory workers. The aim of the law is to safeguard the interest of workers and protect them from exploitation and concerned with the safety, health, and welfare of people at work. Thus, this Act deals with standards regarding safety, welfare and working hours, leaves of workers etc. This Act also helps to put an end to unfair labour practices and provides for the rights, privileges, obligations, and responsibilities of the workforce.
The Maternity Benefit Act 1961 is enacted to improve the working conditions for working women in India. This Act aims at ending unfavorable work conditions and lack of support at the workplace which led the working mother to quit their jobs and put an end to her career aspiration. So, because of this legislation, a working woman may maintain a balance between her work life and family life and continue to enjoy her own identity. Thus, this Act provides for paid maternity leave for 26 weeks, maternity leave to adoptive and commissioning mother, option to work from home, creche facility in the workplace etc to preserve the welfare of the workplace.
Bonus simply means an extra sum of money paid to the employees. It is actually a distribution of profit of the company. The Payment of Bonus Act has been enacted to provide payment of bonus to employees on the basis of profit or productivity of the establishment. The minimum amount of bonus is 8.33% and the maximum amount of bonus is 20% of the salary of the employee which is to be paid within 8 months from the close of the accounting year.
The Equal Remuneration Act protects woman employee from sexual discrimination in the matter of payment of remuneration. The Equal Remunerations Act is based on the principle of gender justice that for the same or similar work, i.e. when a man and a woman performed work of similar nature under similar working conditions, with same skill, effort, and responsibility, both are entitled to get same remuneration. Employer is thus entrusted with duty to pay equal remuneration to man and woman. Thus, main purpose of this Act is to prohibit the discrimination between man and woman in the matter of payment and employment.
This Act has been enacted for protection of woman from sexual harassment at workplace, provide her a safe, secure and dignified working environment, free from all forms of harassment, and to deal with and settle complaints relating to sexual harassment at workplace. A woman victim under the Act is a woman of any age, whether employed or not (for example- customer or client), who has been subjected to any act of sexual harassment whether physical or verbal can claim protection under this Act. This Act also defines sexual harassment and lays down provision for compulsory set up of complaint committee in the workplace.
This Act has been enacted to protect contract labours from inferior labour status, casual nature of employment, lack of job security and poor economic conditions. Contract labours are also suffering exploitation as they are not employed directly under the employer. So the Contract Labour (Regulation and Abolition) Act, 1970 is passed to provide legislative protection to these workers who has no rights to claim what they deserved like wage, socio-economic protection, basic amenities, urinals, drinking water facility etc. This Act provides for responsibilities to the employer and contractor which they should follow for welfare of the contract labours and establish Boards to deal with the claim of contract labour.
Gratuity is an additional payment like gift given to an employee as thanks and reward for rendering five or more years of continuous service. Gratuity is payable at the time of superannuation, retirement; or resignation or on death or disablement due to accident or disease; or termination due to retrenchment or layoff. As per the Payment of Gratuity Act, formula for gratuity calculation is- Basic wage + Dearness Allowance divided by 26*15*no. of years of service. Thus, gratuity is a retiring benefit to the workman who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer.
Profession Tax is a state-level tax payable by the salaried employees and independent professionals such as Chartered Accountant, doctors, journalists who enjoying a monthly income above a certain amount declared by the state. So, the Professional Tax Act is enacted by states to regulate the payment of professional tax. Professional tax is the source of revenue for the state which can be used by state for welfare of general public. So, the Act makes rule that a person is liable to pay Professional tax to the state in which the person is employed.
- Legal Metrology
- The Foreign Exchange Management Act (FEMA) 1999
- Food Safety and Standards Act, 2006
- The Insurance Regulatory and Development Authority Act, 1999 (IRDA)
- Drugs and Cosmetics Act 1940
- Municipalities Act
Legislation on measurements and measuring instruments is required in all these cases when there is a need to protect both the buyer and the seller in a commercial transaction. Legal Metrology maintains uniformity and accuracy in all weights and measures and weighing and measuring Instruments used by traders and importers to ensure security and accuracy of the product. So, Legal Metrology Act has been enacted to establish and enforce standards of weights and measures, regulate and monitor trade and commerce in weights and measures in relation to the goods which are sold, distributed, or imported by weight, measure or numbers etc. The main objective of Legal Metrology Act is to ensure public guarantee from the point of view of security and accuracy of weighing and measurement. The manufacturer, dealer, and repairer of weights and measures should mandatorily get a license from Legal Metrology Department for dealing in weighing & measuring instruments. This Act provides for the rules to be followed by the manufacturer, dealer, importer, packer, repairer in course of business. It also lays down rules for verification and stamping of weights and measures, units of weights and numbers etc. Non -compliance with the Legal Metrology Act may lead to imprisonment up to 1 year and fine up to 1 lakh Rupees or both.
The Foreign Exchange Management Act 1999 (FEMA) has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA regulates external trade and payment and promote the orderly development and maintenance of foreign exchange market in India. FEMA is applicable to all the companies and people in India and the companies located outside India but owned or controlled by a resident of India. FEMA regulates the foreign investment in India and opening of bank account by a foreign national and transfer of fund from India. It gives full freedom to a person resident in India, who was earlier resident outside India, to hold or own or transfer any foreign security or immovable property situated outside India and acquired when he was resident of the foreign country. It also lays down the areas requiring specific permissions of the Reserve Bank or Government of India on acquisition or holding of foreign exchange. A significant change that the FEMA brought is that it made all offenses regarding foreign exchange as civil offenses.
Food Safety and Standards Act (FSSA), 2006 is enacted to improve quality of food with changing needs of time by setting the standard of food. The main purposes of this Act are science-based standards of food products and to regulate the manufacture, storage, distribution transportation, sale and import of the food articles to ensure the availability of safe and wholesome food. Prior to enactment of the Food Safety and Standard Act 2006, there were multiple food laws, departments and controlling Authorities which made compliance with food laws more complex. So, to remove this chaotic situation, the Food Safety and Standards Act has been enacted to consolidate all the food laws, departments and authority under one umbrella. This Act establishes the Food Safety and Standards Authority of India (FSSAI) to frame regulation, guidelines for food safety and implement this Act. This Act also lays down the need to obtain food licence by food business operators and to follow the notices of FSSAI and the labelling guidelines in public interest.
This Act has been enacted to establish the national agency named Insurance Regulatory and Development Authority (IRDA) to regulate the Indian insurance industry and protect the interests of the policyholders and ensure fair treatment by insurance industry. The main aim of IRDA is to maintain the investment of fund by insurance company, control the condition of advertisements, settlement of dispute between insurer and intermediary or insurance company, and specify the percentage of life insurance business and general insurance business etc. Thus, the main purpose of this Act is to make sure that insurance policy holder receives precise, accurate, clear & correct information about the products & services provided by insurance companies & also make customers aware about their duties & responsibilities in this regard.
The Drugs and Cosmetics Act 1940 has been enacted to regulate the import, manufacture, distribution and sale of drugs and cosmetics in India. Drugs means all medicines and devices for internal or external use of human beings or animals used for diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals. And Cosmetic means any article intended to be rubbed, poured, sprinkled or sprayed on, or applied to human body for cleansing, beautifying, promoting attractiveness, or altering the appearance. This Act ensures the safety and wellbeing of the patients by confirming the drugs and cosmetics standards. This Act also prescribes guidelines for the storage, sale, display and prescription drugs and cosmetics products. Manufacturer, the authorized agent of the manufacture, the subsidiary of the manufacturer or any other importer is eligible to import and sale of drugs and cosmetics. For manufacturing, sale or import of drugs and cosmetics, the products are required to be registered with Central Drugs Standards Control Organization (CDSCO) as per the Act.
Municipal Law is the law specific to a city or municipal area. It covers a wide range of issues, including, property tax, building laws, education policies. Every state has their own Municipalities Act that contains rules about the local administrative bodies i.e. municipal councils, corporations, Boards etc for planned development of the urban area to ensure suitable levels of infrastructure and services to the citizens. The municipal bodies regulate the activities such as record taking and budgeting, land-building permission, hawkers certificate, trade licence, public health and sanitation, like water supply, public vaccination, control of diseases, prevention of pollution, collection & disposal of waste, maintenance of sewers ; death and birth certificate, fire services, slam improvement and upgradation, urban poverty alleviation, planning and development of the area like construction & maintenance of streets, bridges, etc., control & regulation of building activity, street lighting, tree plantations, and other public amenities etc.
Prior to 2017, the tax system of India levied multiple taxes at each stage of the supply chain, without taking credit for taxes paid at previous stages. As a result, the end cost of the product does not clearly show the actual cost of the product. How much tax was applied was also difficult to get due to this complex tax system. So, the GST Act has been enacted to levy and collection of tax by Government on intra-State and interstate supply of goods or services. This Act provides for centralisation of the authority from the states into GST Council which comprises of representative of the Union Government and state Governments.
Finance Act 2017 has been enacted to give effect to financial proposals at the beginning of every financial year. The most important element is the rules laid down in the Act with respect to Income Tax Rates. Every year, the Act lays down all the associated provisions related to Income Tax in India. That means the Finance Act is responsible for laying down the tax slabs that applies to taxpayers. This Act specifies that every individual/HUF, not covered by Tax Audit Provisions, shall be liable to deduct TDS at the rate of 5%, if the monthly rent exceeds Rs. 50,000/- per month. This Act also reduced time limit for holding of capital asset to 24 months. This Act also provides for the law applicable to the owners and builders of the property, maintenance of book of accounts and audit, taxability of dividends, tax provision for acquisition of asset without consideration by firms and companies etc.
Competition Act is enacted to set policies which will effect the behaviour of enterprises and structure of industry to put an end to unfair competition such as collusive price fixing, deliberate reduction in output in order to increase prices, restricting other enterprises from carrying out their business etc. Thus, this Act also establishes a Commission to prevent anti-competitive practices, promote and sustain competition, protect the interests of the consumers and ensure freedom of trade.
- The Employees' Provident Funds And Miscellaneous Provisions Act, 1952
- Employee State Insurance Act, 1948
- Labour Welfare Fund Act, 1953
Employee Provident Fund (EPF) is a very important investment for the necessities of employee’s future. It is the most beneficial and popular investment scheme for the salaried persons in India. Salaried person withdrawing less than 15000 basic wage has to contribute towards the EPF Scheme and the fruit of this investment can be obtained as a retirement benefit and insurance fund, or in case of extreme necessities. So, to govern the EPF, the Employees Provident Fund and Miscellaneous Provisions Act 1952 is enacted. This Act establishes the Employees Provident Fund Organization which is empowered to maintain the EPF and Employees deposit linked insurance Fund. So, the primary goal of this Act is to ensure a worry-free future for employees.
Employee State Insurance (ESI) is the insurance scheme made for employees drawing wage up to 21,000 Rupees per month. The main aim of this Scheme is protection of employees and their families. Such protection is given in terms of money or medical benefit in ESI hospitals. So, the Employee State Insurance Act is enacted to balance financial distress of employee such as sickness, maternity, temporary or permanent disablement, occupational disease or death due to employment injury. Under this Act, Employees State Insurance Corporation is established which administers and controls the ESI. Sample Description
Labour Welfare Fund is a part of social welfare of the labours which brings state of wellbeing, happiness, satisfaction and development of the labours to live a dignified life. It is a statutory contribution as determined by State Labour Welfare Board and contributed by individuals and state authorities. So, labour welfare fund is a monetary aid for labourers to provide educational facilities and reading rooms for the children of the workers, medical facilities, excursions, tours and holiday homes, vocational training, recreational facilities in form of music, dance, drama, games, sports, paintings etc, transport facilities to workers etc.
Limited Liability Partnership (LLP) Act 2008 has been enacted to introduce the concept of LLP in India. LLP is not like the general Partnership where individual partners are liable for partnership’s liability; but LLP is a body corporate having different legal entity from its partners and any change in the partners of a LLP shall not affect the existence, rights or liabilities of the LLP. This Act provides for the nature of LLP, minimum number of partners to establish LLP, procedure for incorporation, registration of LLP, liabilities of designated partners, its transactions and all other related matters. This Act also provides for conversions of partnership firm, a private limited company and an unlisted public company into LLP in accordance with the LLP Rules and the Schedules so that it can limit the liability of the partners.
The Indian Companies Act 2013 replaced the Indian Companies Act, 1956 to govern all listed and unlisted companies in the country. This Act has introduced new concept of class action suits with a view of making shareholders and other stakeholders, more informed and knowledgeable about their rights. This Act also paves way for woman empowerment by appointment of at least one-woman Director on the Board (for certain class of companies). This Act limits the minimum and maximum member of a company. The minimum is one person for a private company and the maximum number of partners or members in any association or partnership is limited up to one hundred. However, this restriction will not apply to an association or partnership, constituted by professionals like lawyer, chartered accountants, company secretaries, etc. This Act has given an option of keep books of accounts in electronic form. As per the Act, a company would be mandatorily required to keep 2% of its profits for “Corporate Social Responsibility. Apart from these, the Act introduces National Company Law Tribunal and replaced the Company Law Board and Board for Industrial and Financial Reconstruction.