Turning a business dream into reality, running a successful business and achieving consistent growth is hard work. Any individual who has embarked on such a journey would agree. 

However, many may not know that leading companies or any firm, for that matter need to meet umpteen regulations, laws and standards in India to avoid legal hassles – this includes tax laws, labour laws and myriad industry-specific regulations too. In short, there’s a whole lot of compliance-related work that goes behind the scenes and your business can’t afford to ignore it.

In this blog, we explore the major statutory compliances in India that you must know for your business to flourish without hiccups.  

First Up, Let’s Understand What is Statutory Compliances

Statutory compliances are sets of mandatory rules and regulations which your business needs to follow in India. The legal requirements are imposed by both the state and central government of India; you need to make sure that departments such as HR, Payroll and others comply. Sounds easy? Not so much as you will find in the next section.

Key Statutory Compliances in India Your Business Must Know

Tax Compliances

Can business and taxes be far away? You know the answer. So, what your business need to do? First of all, obtain a Permanent Account Number (PAN). Always file annual income tax returns. The corporate tax rates vary depending on the nature and size of the business. There are regular updates to tax laws, mostly with the annual budget roll out by the government. Keep an eye on the same to stay informed and stay compliant.

 “Staying updated with income tax regulations is crucial for businesses to avoid penalties and ensure smooth operations. The majority of businesses know that. However, many make errors in compliance and that makes the process worrisome,” stated one of our compliance experts.  

• Goods and Services Tax (GST)

You must have heard about GST. It is a unified tax system that has replaced multiple indirect taxes. Many argue the advantages of it while others disagree with the assessment. Whatever the case, your business needs to register for GST if the turnover exceeds the specified threshold and file monthly, quarterly, and annual GST returns.

As of April 2024, the GST Council has made various recommendations. You can read it here.

• Tax Deducted at Source

Your business is required to deduct tax at source for specific payments like salaries, interest, and contractual payments. TDS returns also must be filed quarterly. The Central Board of Direct Taxes (CBDT), the apex authority of direct taxation in India, consistently make revisions and changes in the rules related to TDS. Keep yourself updated to ease compliance burdens on the business. If you are tied up with core tasks, compliance solutions provider like Calibehr can support you with statutory compliances.

Labour Law Compliances

• Employees' Provident Fund (EPF)

If your company consist of 20 or more employees, EPF is mandatory. It requires both your employer and employee to make contributions. Who does it help? The EPF scheme ensures long-term financial security for employees. Employers can attract good talents by offering EPF.

• Employees' State Insurance (ESI)

ESI is applicable to businesses with 10 or more employees, providing medical and cash benefits in case of sickness, maternity, and employment injury.

• Payment of Gratuity Act

Businesses need to pay gratuity to employees upon retirement or termination after a certain period of continuous service. This act ensures financial stability for employees post-employment.

• Minimum Wages Act

The Minimum Wages Act mandates the payment of minimum wages to employees based on their work type and location.

Labour law compliance has dual benefits, explained our compliance expert. “Yes, labour compliance when handled efficiently ensures legal adherence and at the same time it creates a positive work environment that boosts employee morale.”

Industry-Specific Compliances

There are unique and specific regulatory requirements depending on the industry.

Here are some examples:

Ø  Food Industry: Businesses must obtain licenses from the Food Safety and Standards Authority of India (FSSAI).

Ø  Pharmaceuticals: Requires approvals from the Central Drugs Standard Control Organization (CDSCO).

Ø  IT and Data Protection: Adherence to the Information Technology Act and data protection laws is critical for IT companies.

Navigating the complex landscape of statutory compliances in India can seem like a daunting task. However, for your business to operate smoothly and legally, it is imperative to comply with statutory compliance.

By understanding the various compliance requirements, staying updated with regulatory changes, and implementing a robust compliance management system, businesses can mitigate risks, avoid legal troubles, and focus on growth and innovation. Stay informed, stay compliant, and ensure your business thrives within the regulatory framework of India.

Calibehr is a leading compliance service provider operating PAN-India. Get in touch with our compliance experts to know how we can help your business.