Category: HR software

The latest commotion regarding the “No Tax Up to 12 Lakhs” rule in India’s new tax system for FY 2025-26 has employers as well as employees struggling with complicated tax systems. Complying with constantly changing government mandates and running payroll processes with ease is a major challenge for organisations. This is where PeopleHR India HR Software takes over as the definitive solution, streamlining tax compliance, payroll processing, and government reporting with unmatched ease of implementation.

Why Tax Compliance is Important for Businesses?

Compliance with India’s tax laws can be tedious, with frequent changes in exemptions, deductions, and slabs. Non-compliance can result in penalties and financial losses. For employers, it is important to ensure that employees get the right tax deductions while meeting government requirements to steer clear of legal and financial traps.

How PeopleHR India HR Software Facilitates Smooth Tax Compliance?

PeopleHR India HR Software makes all tax complexities manageable with ease while keeping employers and employees up-to-date with the most recent government regulations. This is how it works:

1. Automated Calculations of Payroll Tax

It takes too much time and effort to perform payroll deductions, tax calculations, and compliance manually. PeopleHR India simplifies payroll processing while accurately calculating:

• Income Tax as per the latest slabs
• Professional Tax (PT) deductions
• Employee Provident Fund (EPF)
• Employee State Insurance (ESI)
• Labour Welfare Fund (LWF)

This automation ensures compliance with government norms while eliminating manual errors.

2. Effortless Government Filings and Reports

With timely filing of tax requirements, PeopleHR India produces automatic reports and e-filings for:

• TDS (Tax Deducted at Source) submissions
• Form 16 generation for employees
• EPF & ESI compliance filings
• GST-related payroll requirements

This ensures that businesses stay ahead of deadlines and avoid penalties.

3. Customizable Tax Rules for Every Employee

PeopleHR India realizes that various employees carry various tax implications. The software features adjustable tax settings according to:

• Salary structure and components
• Investment declarations
• Exemptions under sections 80C, 80D, HRA, LTA, etc.

With real-time tax updates, both employers and employees can see their deductions and maximize tax-saving potential.

4. Seamless Integration with Payroll and Accounting

To offer a trouble-free payroll experience, PeopleHR India integrates perfectly with accounting and financial systems to ensure seamless reconciliation of wages, tax withholdings, and statutory payments. This reduces manual entry, errors, and improves financial transparency.

5. Real-Time Compliance Updates

With regular changes in taxes, compliance is paramount. Tax laws are updated automatically by PeopleHR India in the system, and hence companies don’t need to worry about old tax rates or compliance.

Enabling Employees through Self-Service Capabilities

PeopleHR India is more than employer benefits alone—it also enhances employees by giving them:

• A Self-Service Portal to access salary slips, tax deductions, and Form 16
• Investment Declaration Options to optimize tax savings
• Automated Tax Estimations for better financial planning

Why Choose PeopleHR India for Tax and Compliance Management?

✔ Accuracy & Compliance: Eliminates errors and ensures compliance with the latest tax regulations.

✔ Time-Saving Automation: Reduces manual effort and simplifies payroll tax management.

✔ Seamless Integration: Connects with financial and accounting systems for smooth operations.

✔ User-Friendly Interface: Provides easy-to-use dashboards for both employers and employees.

✔ Reliable Support: Expert assistance for all payroll and tax-related queries.

Tax compliance nightmares are a thing of the past. With PeopleHR India HR Software, organizations can automate payrolls, check tax deductions with precision, and keep up to date with changing government regulations seamlessly. As either an employer wanting compliance guarantee or an employee requiring tax transparency, PeopleHR India is your easy solution for carefree payroll and tax management.

Stay compliant, remain stress-free—select PeopleHR India today!

The Indian tax landscape is buzzing with discussions about the new tax regime and the possibility of “no tax up to 12 lakhs.” While the statement isn’t entirely straightforward, it does reflect a significant change in how tax rebates are structured. Let’s delve into the details to understand the reality behind this claim.

The New Tax Regime: A Quick Recap

The Indian government has made the new tax regime the default option for taxpayers. However, you can still choose the old regime if it better suits your financial needs. The new regime simplifies tax calculations by offering lower tax rates without many of the deductions available under the old regime.

Understanding the Revised Tax Slabs

Here’s a clear look at the income tax slabs under the new tax regime for FY 2025-26:

• Up to Rs. 4,00,000: Nil
• Rs. 4,00,001 – Rs. 8,00,000: 5%
• Rs. 8,00,001 – Rs. 12,00,000: 10%
• Rs. 12,00,001 – Rs. 16,00,000: 15%
• Rs. 16,00,001 – Rs. 20,00,000: 20%
• Rs. 20,00,001 – Rs. 24,00,000: 25%
• Above Rs. 24,00,000: 30%

The Key: Tax Rebate Under Section 87A

The “no tax up to 12 lakhs” concept stems from the enhanced tax rebate under Section 87A. This rebate effectively reduces your tax liability. Here’s how it works:

• The government has increased the rebate, allowing individuals with incomes up to a certain threshold to have zero tax liability.
• This rebate, when applied to the tax calculated based on the new tax slabs, leads to the effective “no tax” scenario.
• Marginal Relief:
  • It is very important to note that marginal relief is also an important part of this calculation. This helps to prevent a very large jump in tax liability for those who earn slightly over the rebate limit.
• Salaried Individuals and the Standard Deduction:
  • For salaried individuals, the standard deduction of Rs. 75,000 further increases the effective income threshold for zero tax liability.
  • Therefore, with the standard deduction, salaried individuals can have a zero tax liability up to an income of approximately Rs. 12.75 lakhs.

Clarifying the “No Tax” Claim

It’s crucial to understand that:

• The “no tax” situation is achieved through the tax rebate, not a complete exemption of income up to 12 lakhs from taxation.
• The rebate is applied after calculating your tax based on the applicable tax slabs.
• Capital gains and other income that are taxed at special rates, are not included in this calculation.
• Therefore, someone can earn less than 12.75 lakhs, and still have a tax liability, if they have capital gains.

Choosing the Right Tax Regime

Deciding between the new and old tax regimes depends on your individual financial situation:

• New Regime:
  • Simplified tax structure.
  • Potentially lower tax rates for certain income brackets.
  • Best for individuals with limited investments and deductions.
• Old Regime:
  • Allows for various deductions and exemptions (e.g., Section 80C, 80D).
  • Potentially beneficial for individuals with significant investments and deductions.

Stay Informed

• Always refer to the official website of the Income Tax Department of India for the most accurate and up-to-date information.
• Consult with a tax professional to receive personalized advice.

By understanding the interplay between the new tax slabs, the tax rebate, and the standard deduction, you can make informed decisions to optimize your tax liability.

To understand the old vs new tax slabs, click here!

The Indian government’s recent tax structure overhaul aims to simplify taxation and stimulate economic growth. Both companies and employees are now assessing the impact of these changes on their financial planning and operational strategies. This article dives deep into the gains and losses experienced by both parties under the new tax regime, supported by updated tax slabs, practical examples, and conceptual graphs.

Understanding the Old vs. New Tax Regime

The old tax regime allowed taxpayers to leverage various exemptions and deductions to reduce their taxable income. Conversely, the new tax regime offers lower tax rates but eliminates most of these exemptions and deductions.

Comparison of Tax Rates (FY 2024-25)

Old Tax Regime (FY 2024-25):

Annual Income (₹)	Tax Rate
Up to 2,50,000	Nil
2,50,001 – 5,00,000	5%
5,00,001 – 10,00,000	20%
Above 10,00,000	30%

New Tax Regime (FY 2024-25):

Annual Income (₹)	Tax Rate
Up to 3,00,000	Nil
3,00,001 – 6,00,000	5%
6,00,001 – 9,00,000	10%
9,00,001 – 12,00,000	15%
12,00,001 – 15,00,000	20%
Above 15,00,000	30%
Standard Deduction	₹50,000

Note: Individuals with taxable income up to ₹7,00,000 are eligible for a tax rebate under Section 87A, effectively resulting in zero tax liability.

Impact on Employees

Gains for Employees:

• Tax Rebate Benefit: The rebate under Section 87A for incomes up to ₹7,00,000 provides significant relief.
• Simplified Tax Filing: Reduced complexity due to fewer exemptions and deductions.
• Increased Take-Home Salary: Potential for higher net pay for those not heavily reliant on deductions.

Losses for Employees:

• Elimination of Deductions: Loss of benefits under Section 80C (PPF, EPF, etc.).
• Reduced Home Loan Benefits: Limited deductions on home loan interest under Section 24(b).
• Neutralized Retirement Savings: No direct tax benefits on EPF and NPS contributions within the new regime.

Illustrative Graph 1: Tax Liability Comparison

Here’s a bar graph comparing tax liabilities under both regimes for income levels of ₹5 lakh, ₹7 lakh, and ₹10 lakh.

Practical Employee Example:

• Employee A earns ₹8 lakh annually, invests ₹1.5 lakh in 80C, and pays ₹1 lakh in home loan interest.
• Under the old regime, they could significantly reduce their taxable income.
• Under the new regime, their tax liability might be different due to the absence of these deductions. A tax calculator should be used to see the exact difference.

Impact on Companies

Gains for Companies:

• Simplified Payroll Processing: Reduced administrative burden due to fewer deductions.
• Enhanced Employee Satisfaction: Higher take-home pay can improve morale and retention.
• Streamlined Compensation: More flexibility in structuring salary packages.

Losses for Companies:

• Reduced Appeal of Benefits: Tax-free benefits lose their attractiveness.
• Challenges in Promoting Savings: Difficulty in incentivizing retirement savings.
• CTC Restructuring: Need to reassess and potentially revise compensation structures.

Illustrative Graph 2: Employer Benefit Changes

Here’s a bar graph illustrating the simplification of payroll processing due to the new tax regime.

Practical Company Example:

• A company may need to increase the base salary component of its CTC to compensate for the loss of tax-saving benefits, ensuring competitive compensation packages.

Which Regime Should Employees Choose?

Consider your financial situation and priorities.

Comparison Table for Employee Decision Making:

Financial Situation	Recommended Regime
Significant investments in tax-saving instruments	Old Regime
Minimal tax-saving investments	New Regime
High home loan interest payments	Old Regime
Preference for simplified tax filing	New Regime

The new tax regime brings both opportunities and challenges. Employees must carefully evaluate their options, while companies need to adapt their strategies. The long-term effects on the economy and workforce will unfold over time. Please stay tuned for future updates regarding potential changes to the tax regime, including any adjustments to exemption or rebate limits that may occur in subsequent financial years.

Navigating the new tax regime can be complex. If you have any questions or need assistance with payroll management or HR-related issues, PeopleHR India is here to help. Contact us today for a consultation. Share your thoughts and experiences in the comments below!

For more detailed information on the latest tax slabs and regulations, refer to the official Income Tax Department guidelines.

incometax.gov.in

Disclaimer:

Tax laws are subject to change. The information provided is for general guidance only and should not be considered professional tax advice. Please consult with a qualified tax advisor for personalized recommendations.

In the fast-paced world of business, where efficiency and accuracy are paramount, payroll management stands as one of the most critical functions for any organization. For Indian companies, navigating the complexities of payroll can be particularly challenging due to the country’s diverse labor laws, tax regulations, and compliance requirements. This is where the perfect payroll management software integrated into your Human Resource Management System (HRMS) becomes not just a luxury, but a necessity.

The Payroll Puzzle: Why It Matters

Payroll is not about merely disbursal of salaries. It includes a series of activities such as computation of salary, deduction of tax, benefits of employees, adherence to labor laws, and more. Any error in this would lead to disgruntled minds, legal punishments, and monetary losses. In India, the stakes run even higher as there is a variety of statutory compliances, like Provident Fund (PF), Employee State Insurance (ESI), Professional Tax, and TDS.

The Role of Payroll Management Software in HRMS

The implementation of a comprehensive payroll management software in your HRMS will be a total makeover for the way your organization will handle its payroll. Here is why it’s indispensable:

1. Accuracy and Efficiency

Manual payroll processing is prone to errors, especially when dealing with complex calculations and multiple variables. Payroll software automates these calculations, ensuring accuracy and saving time. For Indian companies, where payroll often involves multiple components like allowances, bonuses, and deductions, automation is a game-changer.

2. Compliance Made Easy

Labor and tax laws of India keep changing every moment. The legal updates can be very challenging. Payroll management software keeps getting updated with the latest legal requirements so that your company will not miss out on anything. Be it TDS return filing, PF contribution, or the new wage code, everything in an effortless way is taken care of.

3. Employee Self-Service Portals

Most of the modern payroll software provides employee self-service portals, where employees can see their pay slips, tax details, and other payroll-related information. This increases transparency and reduces the HR department’s workload. In India, where employees are becoming increasingly tech-savvy workers, this is a feature that adds great value.

4. Cost Savings

Investing in payroll software may appear to be an added expense, but it actually saves money in the long run. It reduces errors, minimizes compliance risks, and streamlines processes, cutting down on administrative costs. Additionally, it frees up your HR team to focus on more strategic tasks, thus improving overall productivity.

5. Scalability

As your company grows, so does the complexity of your payroll. Whether you’re hiring more employees, expanding to new states, or dealing with international payroll, the right software can scale with your business. This is particularly important for Indian companies, which often operate in diverse geographic locations with varying labor laws.

6. Data Security

Payroll data is highly sensitive, and any breach can have serious consequences. Payroll management software offers robust security features, including data encryption, access controls, and regular backups, ensuring that your data is safe from unauthorized access and cyber threats.

Choosing the Perfect Payroll Management Software

Not all payroll software is created equal. When selecting the perfect payroll management software for your HRMS, consider the following factors:

• Compliance Capabilities: Ensure the software is equipped to handle Indian labor laws and tax regulations.
• User-Friendly Interface: The software should be easy to use for both HR professionals and employees.
• Integration: It should seamlessly integrate with your existing HRMS and other business systems.
• Customization: Look for software that can be tailored to meet your specific payroll needs.
• Support and Updates: Choose a vendor that offers reliable customer support and regular software updates.

Having the perfect payroll management software integrated into your HRMS in this dynamic and complex business environment of India is no longer an option; it has become essential. It ensures accuracy, compliance, and efficiency but also boosts employee satisfaction and drives business growth. With the right payroll software, Indian companies can easily navigate the intricacies of payroll management and focus on what matters the most: building a successful and sustainable business.

So, if you haven’t already, it’s time to take a closer look at your payroll processes and consider upgrading to a sophisticated payroll management solution. Your HR team, your employees, and your bottom line will thank you!

Payroll management in itself is complicated, not to mention the ever-changing compliance regulations. It doesn’t have to be when the correct payroll software is implemented. PeopleHR India has created Payroll Management Software that can simplify and streamline payroll services for businesses of any size. So, let’s now talk about how this intricate tool can revolutionize your way of payroll management with compliance and efficiency and also saving time.

India’s Most Trusted Payroll Software: Customizable Salary Structure Management

One of the key features of PeopleHR India’s Payroll Software is its ability to configure salary structures. Whether your company has a straightforward or complex salary structure, our software adapts to your needs. It offers flexibility in managing different pay components, ensuring that each employee’s compensation is accurately structured and compliant with regulations.

TDS Declaration: Simplify Tax Planning for Employees

It might become quite complex under India’s dual tax regime, Old and New, particularly while making TDS calculations. Payroll Software from PeopleHR India has the most user-friendly feature of TDS Declaration-employees have to declare investment plans and easily calculate their tax liability under both the regimes so that they could make an informed choice about which scheme they would like to get into and avoid the stress of last-minute tax planning.

Salary Loan & Recovery: Manage Employee Loans with Ease

It is a very effective way to ensure loyalty among employees by availing financial flexibility. The Payroll Software by PeopleHR India makes it possible for an organization to manage salary loans through an easy interface to configure the loan amount and its repayment schedules. Flexible payment options along with a transparent recovery status tracker help companies manage loans easily while keeping an accurate record of repayment.

Automatic TDS Calculations & Provisional Form 16: Time-Saving Solutions

Why waste time on manual tax calculations when automation is at your fingertips? Automatic TDS calculation by our software makes sure accuracy and adherence to the latest income tax rules. Also, generating ready-made Provisional Form 16 has never been this easy, meaning that businesses can save as much time as possible, and even more importantly, avoid errors. This means the headache of manual data entry does not plague your organizations for strict compliance, in turn.

Effortless Payroll Generation: Simplified and Accurate

Payroll generation, one of the core HR operations, has never been so smooth as it has now been made with PeopleHR India. Our HRMS software takes care of entire payroll generation processes to ensure all calculations are precise and up to statutory norms. It is perfect for businesses looking to manage payroll operations in an accurate manner, easier than before.

Payroll MIS: Comprehensive Reporting for Better Decision-Making

This Payroll MIS tool, therefore, allows business to obtain access to the potent reporting suite within PeopleHR India. All it takes is a few clicks, and then its salary slips, relieving letters, and FnF letters are ready. Attendance registers are kept automatically, and salary registers can be quickly created and managed. Such reports give insightful information into payroll operations, making businesses stay more organized and informed.

Compliance Documents: Stress-Free Statutory Compliance Management

Many times, compliance is one of the most vital aspects of payroll management, and at PeopleHR India, their software lets you stay on top of all statutory requirements. Auto-Generate documents as per PF, ESIC, and LWF need – Generate all kinds of Challans, PT Challan, TDS Challan, ESIC Challan Import File, EPF ECR Import File, among others.

No hassle will be involved filing TDS Quarterly Returns, PF monthly and yearly returns, and ESIC returns.

Why Choose PeopleHR India’s Payroll Management Software?

• User-Friendly Interface: Our payroll solution is designed with simplicity in mind, making it easy for HR teams to navigate and manage payroll operations with ease.
• Efficiency and Automation: Automate routine work such as TDS calculations, payslip generation, and compliance documentations to save valuable time and effort.
• Accuracy and Compliance: With automatic updates as per the latest tax regulations, you can trust that your payroll processes remain compliant.
• Customizable Solutions:  Flexible salary structure management lets businesses easily adapt the software to suit their specific needs.

Experience Peace of Mind with PeopleHR India

Payroll need not be a task that causes stress. Rely on PeopleHR India’s trusted Payroll Management Software for relief; for businesses can focus on growth while leaving the complexities to us. Our solution makes your payroll process flexible, accurate, and compliant. Do away with manual calculations with an erstwhile hello to a new era of automated efficient payroll management.

Unlock the full potential of payroll operations with PeopleHR India!