Allowances

dear sourav, 

In maharashtra, the Mah. Min. HRA prevails if the employee strength is more than 50, then 5% of basic plus DA is to be paid by way of HRA.  However the increment part, there is no statute governing increments.  It is mutually decided by the parties after negotiation taking into account the inflationary trends as also the output that the co is looking to getting from its employees.  It is a part of collective bargaining.

Dear Darshana,

Since we are a private ltd. co., do we still need to provide DA separtely?

Thanks and Regards,

Sourav

dear sourav,

If  the salary of your employees is more than the statutory minimum wage, you can bifurcate it into basic + special allowance (as declared by the Govt of Mah every 6 months) as you have to pay the esi, pf on that sum also.  The remaining amount if any, first has to be allotted to HRA as per Min . HRA act.  Whether it is private ltd co,  , DA is actually the spl allowance in that sense,  in addition to statutory minimum wage which is mandatory.