Monthly compliance obligations
Monthly statutory compliance forms the backbone of an employer's legal obligations in India. Missing even a single deadline can trigger penalties, interest charges, and in severe cases, prosecution. The most critical monthly obligation is Provident Fund remittance — both the employer's contribution (12% of basic plus DA) and the employee's contribution (12% of basic plus DA) must be deposited with the EPFO by the 15th of the following month. For example, PF deducted from January salaries must be remitted by 15th February. Late payment attracts interest at 12% per annum for delays up to two months and damages ranging from 5% to 25% of arrears depending on the duration of the delay. The Electronic Challan cum Return (ECR) must be filed on the EPFO portal with employee-wise contribution details along with the payment.
Employees' State Insurance (ESI) contributions follow a similar timeline — employer (3.25%) and employee (0.75%) contributions must be deposited by the 15th of the following month through the ESIC portal. Professional Tax, a state-level tax on employment, must be deducted from employee salaries monthly and remitted to the state government within the prescribed deadline (varies by state — typically by the 15th or the end of the following month). Tax Deducted at Source (TDS) on employee salaries under Section 192 of the Income Tax Act must be deposited by the 7th of the following month. For non-salary payments (contractor fees, rent, professional fees), TDS deadlines also fall on the 7th. Additionally, companies with 20 or more employees must maintain the wages register, attendance register, and overtime register as prescribed under the applicable state rules, and these records should be updated monthly.
Quarterly compliance requirements
Quarterly obligations primarily revolve around TDS returns and advance tax. TDS returns (Form 24Q for salary payments and Form 26Q for non-salary payments) must be filed within the prescribed due dates: 31st July for Q1 (April-June), 31st October for Q2 (July-September), 31st January for Q3 (October-December), and 31st May for Q4 (January-March). These returns contain employee-wise details of salary paid, TDS deducted, and PAN details. Filing accurate quarterly returns is essential because the data feeds into employees' Form 26AS (annual tax credit statement), which they use for filing their personal income tax returns. Errors in quarterly TDS returns create reconciliation headaches for both the employer and the employee.
Advance tax obligations apply to the company itself on its estimated income. The due dates are 15th June (15% of estimated tax), 15th September (cumulative 45%), 15th December (cumulative 75%), and 15th March (100%). While this is primarily a finance team responsibility, HR should coordinate with finance on headcount projections and salary budget changes that affect the company's income and tax estimates. ESI also has a quarterly dimension — the contribution period for ESI runs in six-month cycles (April-September and October-March), and employers must file half-yearly returns. Some states also require quarterly filing of professional tax returns, though many have moved to monthly remittance with annual reconciliation. Labour Welfare Fund (LWF) contributions, applicable in states like Maharashtra, Karnataka, Tamil Nadu, and others, are typically due half-yearly or annually depending on the state, and the amounts are nominal (ranging from ₹6 to ₹25 per employee per contribution period).
Annual compliance and filings
Annual compliance represents the year-end reconciliation and reporting obligations. PF annual return (Form 6A) must be filed by 30th April of the following financial year, providing a consolidated employee-wise summary of contributions made during the year. While the ECR system has largely automated this process, employers must verify the data for accuracy. ESI annual return (Form 6) is due within 42 days from the end of the contribution period. Bonus payment under the Payment of Bonus Act must be made within eight months from the close of the accounting year — for most companies with a March year-end, this means bonus payment by 30th November. The minimum bonus is 8.33% of the salary or ₹100, whichever is higher, and the maximum is 20% of the salary. Employees earning up to ₹21,000 per month are eligible, though many companies pay bonuses to all employees regardless of the statutory threshold.
Gratuity provisions must be reviewed annually and reflected in the company's financial statements. Companies are required to either purchase group gratuity insurance or establish an approved gratuity fund to meet their gratuity liability. The provision should be calculated based on actuarial valuation for companies following Ind-AS accounting standards. Annual ROC (Registrar of Companies) filings — including annual returns and financial statements — must be completed within 60 days of the AGM. While these are primarily company secretarial responsibilities, HR data feeds into disclosures related to employee counts, managerial remuneration, and related party transactions. Tax audit under Section 44AB of the Income Tax Act is due by 30th September for companies with turnover exceeding the prescribed threshold, and HR payroll data forms a significant input. Ensure all Form 16 (TDS certificates) are issued to employees by 15th June following the end of the financial year.
State-specific compliance requirements
Indian statutory compliance is complicated by the fact that many labour laws are state subjects, resulting in different rules across states. Shops and Establishments registration must be obtained in every state where the company has a place of business (including, as discussed in our remote hiring guide, potentially in states where remote employees are located). Registration renewal timelines vary — some states require annual renewal while others issue permanent registrations. Professional Tax registration and rates differ significantly: Maharashtra charges ₹2,500 per year for employees earning above ₹10,000 per month, Karnataka charges ₹2,400 per year for those earning above ₹15,000, while Delhi does not levy professional tax at all. The Labour Welfare Fund (LWF), applicable in about 16 states, has different contribution amounts and due dates — Maharashtra requires ₹6 per employee per six months (employer ₹6, employee ₹6), while Tamil Nadu requires ₹20 per employee per year.
Other state-specific requirements include: contract labour registration (if the company engages contract workers above the threshold specified by the state), factory registration and licence renewal (for manufacturing establishments), minimum wages compliance (minimum wages are notified by each state and vary by industry and skill category), and display of mandatory notices and abstracts of various labour laws at the workplace. Companies operating across multiple states often find that tracking these varied requirements manually becomes unmanageable as they scale. A centralised compliance calendar — whether maintained in a spreadsheet, a dedicated compliance tool, or an integrated HR platform — is essential. Workro's compliance hub provides calculators for PF, ESI, gratuity, and CTC structuring that stay current with the latest rates and rules, helping HR teams avoid calculation errors that lead to compliance shortfalls.
DPDP compliance and new labour code readiness
The Digital Personal Data Protection Act, 2023 adds a relatively new compliance layer that many HR teams are still integrating into their processes. Key requirements include: obtaining informed consent from employees and candidates before processing their personal data, maintaining records of consent and the specific purposes for which data is collected, implementing data retention schedules (do not retain candidate data indefinitely after the recruitment process concludes), appointing a Data Protection Officer or equivalent responsible person, establishing a process for handling data principal requests (employees asking to access, correct, or delete their personal data), and conducting periodic data protection impact assessments. Penalties for non-compliance are steep — up to ₹250 crore per instance for serious violations. The most practical first step for HR teams is a data mapping exercise: list every type of personal data you collect, where it is stored, who has access, and what the legal basis for processing is.
New labour code readiness is the other major compliance initiative on every HR leader's agenda. While the four codes have been enacted, state-level rule notification and enforcement timelines continue to evolve. Companies should not wait for enforcement to begin preparation. The priority actions are: restructure salary components to ensure wages (basic plus DA) constitute at least 50% of total remuneration (as discussed in our CTC breakup guide), update employment contracts and offer letter templates, reconfigure payroll systems for the revised wage and contribution calculations, review and update HR policies on working hours (the new code permits a four-day work week with 12-hour shifts, subject to the 48-hour weekly limit), and prepare for unified registration under the Social Security Code. Maintaining a comprehensive compliance checklist — updated quarterly to reflect regulatory changes — is the most effective way to stay ahead of deadlines and avoid penalties. For organisations using Workro, the platform's compliance tools and built-in calculators are continuously updated to reflect the latest statutory requirements, ensuring that HR teams always have accurate figures for PF, ESI, gratuity, and CTC structuring without manual recalculation.