The document is a comprehensive guide on Indian payroll management by Ajit Kumar Yadav, detailing essential processes, compliance requirements, and taxation relevant to payroll professionals. It covers various aspects such as payroll processing, statutory regulations, and specific chapters on tax saving, deductions, and exemptions. The author, a certified payroll professional, aims to provide a user-friendly resource suitable for anyone involved in payroll and HR management.

1. AKumar’s

2. PAYROLL MANAGEMENT
– Indian Payroll Processing
THE ESSENTIALS
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3. (A complete guide book for Payroll & Human Resource-HR)
• Statutory Compliances (PF, ESI, LWF,
TDS…)
• Payroll
Management
• Payroll processing at a glance • Indian Salary Taxation

4. ABOUT THE BOOK
The Essentials of Payroll Management – Indian Payroll Processing, is a fantasy book and professional's
book by author Ajit Kumar Yadav. It was published (1st Edition) on 19th February 2014 on his special
occasion to wide successfully complete 8 years as Payroll Profession in Services Industry & this edition was
published on his birthday 08th August 2015. The book remains popular and has to be recognized as a classic
for Payroll profession.
• This book is “user friendly” and will be found useful by any and everyone dealing with Payroll and HR.
• The book also contains details Table, Tax Rate & formulas, Excel Formulas and Other Rates & Formulas.
• SOLID reference contains a wide coverage of all the information that the Payroll professional require in
their day to day practice.
• This book makes an exhaustive and comprehensive attempt to explain all the legal provisions and
understood calculation related to Salary Calculation & related Payroll in a very easy way.
• The book contains an analytical threadbare analysis of all laws and calculation which is related to Payroll
& others to its, reader MUST refer the right amendment and clause in the right perspective.

5. ABOUT THE AUTHOR
Ajit Kumar is a young Indian Payroll professional and associate to public sector in Service industries. He is
Certified Payroll Professional (CPP) by NAIP & V-Skill and member of CIPP. He did his graduation from Agra
university and Business Management studies from ICFAI. He is doing studies of Company Secretary from ICSI,
India. He has been setup and processed Indian Payroll and related compliances at various levels for more
than 75 companies in 9 years.
Career
He has started his career in 2005 with BL Life Science and He has been named on Esquire's List of the best
performer of the year in January 2006 by BL Life Sciences Pvt Ltd and ranked 1 among the 60 quality Payroll
processing in the company on the time by the SGC Services Pvt Ltd. He has been worked at various levels for
reputed originations and has 10 years wide experience in payroll, compliance and compensation
management.
Current ventures and Business
He is founder of IPTM - The Institute of Payroll Training and Management, which was found in the year 2007
and proprietor of HeyParth Consulting Services, which was setup in September 2014 and is running at Noida
HITEC City of India.

6. Author can be reached at : iptm.india@gmail.com

7. I nspired by Bhagavat a Purana
Wit h Krishna Bhakt i
Dedicat ed t o My Parent s
Lat e Shree Aj ab Singh & Lat e Mrs. Raj Bat i Devi
“I am the source of all spiritual and material worlds. Everything emanates from Me. The wise who perfectly know
this engage in My devotional service and worship Me with all their hearts”
(Lord Krishna, Bhagavad-Gita 10.8)

8. Thanks
I thank you all from the bottom of my heart!
Special Thanks
Guru Ram Kumar Sharma
CA Rajesh Mittal
Dr. Roopak Vashishtha
Late Shree Gaurav Aggrawal
Divik Varshney
Sanjay (Pappy) Yadav
Members of Kamini and Kamine group.

9. Dear Reader,
Thank you f or choosing The Essent ials of Payroll Management – I ndian Payroll
Processing. This book is part of syllabus of I PTM - The I nst it ut e of Payroll Training
and Management as well you’re Payroll Prof ession, all of which are writ t en by Aj it
Kumar who combines pract ical experience wit h a gif t of Payroll Training.
I ’d be very int erest ed t o hear your comment s and get your f eedback on how we’re
doing. Feel f ree t o let me know what you t hink about t his book by sending an email
at aj it yadav121@gmail.com. I f you t hink you have f ounded any t echnical or t yping
sent ence error in t his book, please visit ht t p:/ / ipt m.org.in. Cust omer and readers
f eedback are crit ical t o your ef f ort s at I PTM. Thanks you!
Best Regards,

10. In this section we will cover 20 chapters

11. even will learn more…

12. PART A : OVERVIEW OF PAYROLL MANAGEMENT
Chapter 1 The Role of Payroll Department in an Organization
Chapter 2 Income Under The Head Salaries u/s 17(1) of Income Tax Act, 1961
Chapter 3 Salary Components in terms of Fixed and Variable
Chapter 4 Claim and Reimbursement Management
Chapter 5 Attendance Management System and Resignation (Full and Final) of Exits

13. PART B : PAYROLL PROCESSING AND REPORTS
Chapter 6 Gather Payroll Inputs, Setup Employee’s Information in Payroll System
Chapter 7 Compliances rule & Tax Rates and Determine Calculation & Deductions
Chapter 8 Verification and Payroll Checking Step by Step
Chapter 9 Salary Register, Pay Slips, Bank Transfer and MIS’s
Chapter 10 Prepare Statutory Reports PF, ESI, PT, ESI and TDS Form 24, Form 16 etc.

14. PART C : TAX SAVING - DEDUCTIONS AND EXEMPTIONS
Chapter 11 Deduction (u/s 80C - u/s 80U) of Chapter VI-A of Income Tax Act, 1961
Chapter 12 Validation or Examination of Investment Proofs and Reimbursement Claims
Chapter 13 LTA, HRA, Leave Encashment and Gratuity Exemption Calculations
Chapter 14 Deduction of Entertainment Allowance and Professional Tax
Chapter 15 Deduction of Interest on Housing Loan u/s 24(b) of Income Tax Act, 1961

15. PART D : STATUTORY COMPLIANCES AND THEIR COMPUTATION
Chapter 16 Employee Provided Fund – PF
Chapter 17 Employee State Insurance – ESI
Chapter 18 Professional Tax – PTAX
Chapter 19 Labor Welfare Fund – LWF
Chapter 20 Tax Deduction at Source - TDS

16. Important (Practice F2F)
Appendix The Bottom line (Questions and Answers)
Forms Important Forms and description of Forms and Returns
Bibliography Sources, Referenced, Titles of the works, website and Tables

17. let's learn payroll
L L P

18. What is The Payroll?
A sum of amount that a company does pay to its employees for doing their job service in a
organization is called Payroll.
But
Payroll definition can’t be complete without given description of gross payments, gross
deductions and actual net payout to an employee in a calendar date and noted that these
Payments and Deductions can calculate according to rules and laws which may be differ
organization – organization and state to State.
Payroll = ,

19. Payroll is an important part of financial accounting.
In accounting, payroll is important because payrolls (payroll pay, taxes Deductions) greatly
affect the net income of most companies. Payroll is also often subject to numerous laws and
regulations that companies need to cooperate with.
Of course, payroll is also incredibly important to its recipients: the employees of a company.
Employee morale can be negatively affected by errors and irregularities in payroll, so an
organization must distribute payroll in an appropriate and precise manner.
Understood: Payroll is essential to a company’s financial accounting for many reasons.
Download Payroll Notes of AKumar’s From www.thepayroll.in

20. Mainly A Payroll Management Module includes
Organization Management
Payroll Management
Employee Help Desk
Performance Management
Leave & Loan
Recruitment & Training
PF, ESI, TDS, Statutory compliances
Appraisal & Career Mgmt.
Reimbursement
Employee Self Service
Attendance Processing
Arrear & Bonus
Retirement
Final Settlement …. more

21. FUNCTIONALITY OVERVIEW – PAYROLL

22. FUNCTIONALITY OVERVIEW – PAYROLL PROCESS MODULE
Features Utilities
User Definable Earnings /
Deductions with multiple
Payment units
Cost Center, Designation &
Grade wise Salary Inputs
Employee Master
Auto Number Generation
Formula Inputs
Attendance & Leave, Over Time
Details
Loan / Insurance details
PF Register, ESI register
Income Tax (TDS) & e-TDS
JV Passing, Reconciliation
email – Salary slip
Employee Reporting Hierarchy
Input Wizard & Simulation
Process, Screen wise User
Editable Help
Arrears Computation
Bonus Computation
Final Settlement / Gratuity
Leave Encashment
Reimbursements
Comprehensive Income Tax
Data Ownership (user wise)
Locking of Pay Process
Locking of Inputs
Backup and Restore
Import Data From Excel &
Export to Excel
Recruitment, Appraisal &
Training
Reports
Monthly pay slips
Monthly salary report
Salary disbursement sheet &
Journal Voucher
Bank covering letter
Leave statement
Outstanding loans
Arrears salary statement, Leave
details and Leave register
Bonus statement
Statutory forms & returns
Monthly ESI statement
Provident fund report
Monthly journal reports
Form 16 & Form 24
MIS reports Highlights
User Definable Pay Periods –
(Monthly, Weekly etc.)
Any number of Payment
Processes can be defined
(Overtime payments,
Reimbursements etc.)
User definable Pay slip format
& Separate Pay-Slips
for the defined payment
process
computation formula
Supplementary payments
History of employee
information and pay structure
Generates Cash / Bank advice
statements
Extensive covering of all the
tax rules related to TDS
Loan details and maintains
current balances
Utility for bulk loan issue
Easily integrated with
Attendance recording systems
User definable custom
reporting and querying facility
Electronic bank transfer
Pay slip Mailing
Customizable for any future
changes in pay structure
e-TDS, Form 3A -DBF
conversion
Declaration forms for ESI and
PF, CTC Statement, ESI & PF
challan, Custom Query Builder
for Report, Multiple Group
creation for PF, ESI & Tax
Multi User creation & Privileges
Attendance Processing System

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24. Payroll in India was once upon a time (before 10 - 15 years) considered to be part of Accounts Department. Those are the days when payroll was seen as a mere compliance
function and also as finance/accounting function as money was involved. Performance appraisal was more a ritual done once in a year and performance was not adequately
related to pay. Moreover, Accounts personnel were the only people considered to be fit for doing statutory compliance related jobs such as PF and ESI jobs in an
organization.
In countries like US, even before 15 years Payroll was treated as part of the Compensation & Benefits Management, which is basically HR function. Payroll, as you can see, is
only an event, which is happening at a frequency as may be stipulated by the country/company rules, and is guided by the policy on Compensation & Benefits Management
program of any company. Other countries gradually adopted the concept.
Payroll is also a sensitive matter as employees may have queries when they receive their PaySlip. Not to generalize, Accounts personnel are not very much the right persons
to have the kind of human relations skills to answer such queries with empathy and patience. So, Payroll also became a matter of human relations over years when
employees mattered.
Another reason is the salaries have become more and more linked with employee performance and retention with a substantial part of salary paid as performance-linked
incentive. Performance Management being the HR function, payroll management in a performance-oriented reward system has become HR function.
Accounts department mainly performs a control function and is therefore made as bottleneck. A bottleneck approach is not the right approach when you need to reward
people's performance in a dynamic business environment. So, the payroll function has been transferred to HR to make it stay nearer to the people of the organization so as
to respond quickly to the employees' queries and performance. Of course, Accounts will ultimately monitor the expenses and give their advice regarding any lapse in controls
through audit and other tools.
If HR is not handling payroll with a difference and with what purpose it should handle this function, then it does not matter if Accounts handles it or HR handles it.
“Self creation is become you most dedicated.” - A Kumar
Institute
website
www.iptm.org.in