16 Mar 2022 Ankit Chadha

Everything You Need to Know About Statutory Compliance

Statutory Compliance | TRC Consulting

If we break down the word Statutory Compliance, statutory means required, and Compliance is a state of following a rule or command. The two words are put together to form an important term for a practice that every organization must incorporate into their systems. To be able to answer the question 'what is Statutory Compliance?' You need to know that the people in any company or business are the most vital amongst all the other things. 

All organizations have one common thing at their core: the people. Without the people, an organization cannot function. When we say the people, we refer to the company's employees, who work in various roles and departments to help the organization meet its objectives.

It is a fact that, for a company to function efficiently, it needs to be organized and streamlined, with proper norms and regulations set in place. These regulations extend to every aspect, including its relations with its employees and how it deals with its finance, and this is known as statutory Compliance.

Thus, if you want to answer the question, what is Statutory Compliance? In HR terms (relating to payroll and taxation), Statutory Compliance is the legal structure within which a company must operate regarding the treatment of its employees.

Why Is Statutory Compliance Important? 

Now that you exactly know what is Statutory Compliance, you must understand that every country has its own set of state and central labour laws that companies need to obey. In India, various Statutory Compliances relate to the various labour and taxation laws prevalent in the country.

In the case of Statutory Compliance, the companies need to be updated on all the country's labour laws. Plus, it is also compulsory for them to comply with them. Non-compliance with the laws can cause any company trouble, such as penalties, fines or even worse consequences. That is why every company participates and invests a huge amount of money, effort and time to meet the requirements of Statutory Compliance in India.

Here are some of the labour Acts in India that the companies have to comply with in order to maintain Payroll and Statutory Compliance:

The Workmen's Compensation Act

The Trade Unions Act

The Payment of Wages Act

The Industrial Employment Standing Orders Act, 1946

The Industrial Disputes Act, 1946

The Employees' State Insurance Act

The Minimum Wages Act

The Factories Act

The Employees Provident Fund & Miscellaneous Provisions Act

The Employment Exchanges Act, 1959

The Apprentices Act, 1961

The Payment of Bonus Act, 1965

The Contract Labour 1970

The Payment of Gratuity Act, 1972

The Equal Remuneration Act, 1976

Inter-State Migrant Workmen Act, 1979.

The Child Labour

To get a clearer picture here, let's look at the tax compliances that companies are required to give equal importance to:

  • Maintain books of accounts that present a complete and just overview of the company's financial position. These books must be maintained in a way that they are aligned with the relevant accounting standards and must be reviewed by a licensed auditor or Chartered Accountant.
  • Deposit advance taxes and TDS timely, and file returns according to the rules. This varies with the industry and nature of the company.
  • Carry out a statutory audit as and when the regulation mandates it.
  • All essential paperwork and documents regarding the structure and registration of the company must be in place.
  • Compliance with all these laws is compulsory for every organization in India.

Advantages or Need of Statutory Compliance in India

  1. Avoid Penalties and Other Legal Implications – Statutory Compliance makes certain that an organization doesn't have to pay penalties, face disqualifications, confiscation of a license, fines, complaints, etc. In other words, complying with the prerequisite guidelines and norms ensures that the business faces no legal implications.

  2. Enhanced efficiency – When a company is successfully complying with the mandatory regulations and laws, the company saves up on a lot of time, effort, and crucial resources. The saved time and resources can be utilized in order to generate more revenue and improve the overall productivity of the firm.  

  3. Better PR – A company that is adept in statutory Compliance stands for stability and top-notch work ethics. In other words, the board members, stakeholders and even the employees, along with other people tied up with the business or company in any manner or form, are mindful of the legitimacy of the company's practice and image in the market. To sum it up, any company that participates and practices complete Statutory Compliance is ahead of others when it comes to Public Relations.

  4. Higher Employee Morale – Statutory Compliance inevitably boosts employee morale. Compliance with the mentioned set of regulations guarantees that the company performs at its full potential, with utmost efficiency and with good intent. This helps in boosting the goodwill of the organization. When a company has a good repute, the company's employees have high morale and tend to stick around longer than in a company with statutory non-compliance.

How does TRC Help with Statutory Compliance? 

The Payroll and Statutory Compliance part of an organization's function is more than just values, regulations, and data. It is about exhibiting and verifying accomplishments and complying in the most efficient manner. With our services, you can sustain a solid foundation for your future business goals. 

Our professionals handle all their practices and functions while also explaining the when, how, and why of the plan and implementation procedures to facilitate readiness for any threat or unwarranted situation. 

At TRC Corporate Consulting, we have a robust Statutory Compliance team that helps turn your business achieve sustainable growth and ensure work in the long run. If your plan is to accomplish a competitive lead, an enhanced brand image, and lucrative financial returns. Contact us for more details!

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