Question

Rhea works in a scheduled employment. Her monthly remuneration, all paid in money, comprises: basic pay ₹10,000; dearness allowance ₹2,000; house rent allowance ₹10,000; conveyance allowance ₹4,000; and overtime ₹2,000. For the purposes of the Code on Wages, 2019, her 'wages' for the month amount to-

Q: Answer-Rhea works in a scheduled employment. Her monthly remuneration, all paid in money, comprises: basic...

Section 2y brings basic pay, dearness allowance and retaining allowance into wages, and excludes the enumerated heads - including HRA, conveyance allowance and overtime. Its first proviso is an anti-avoidance check where the payments made under excluded clauses a to i exceed one-half of the employees total remuneration, the excess is deemed remuneration and added to wages. Here the excluded heads total 16,000 one-half of 28,000 is 14,000 the excess of 2,000 is added back. Wages are thus 12,000 2,000 14,000. Option b overlooks the proviso altogether d adds back the whole of the excluded heads instead of only the excess e stretches the second proviso, which operates only for the limited purposes stated in it.

A ₹28,000 - the whole remuneration stipulated, every component being paid in money or capable of being so expressed, and no part being excludible from 'wages'

B ₹12,000 - basic pay and dearness allowance alone, every other head standing outside 'wages' and no addition of any kind arising

C ₹14,000 - basic pay and dearness allowance, plus the excess of the excluded heads over one-half of the total remuneration

D ₹16,000 - the excluded heads themselves, which become wages once they cross one-half of the remuneration

E ₹22,000 - basic pay, dearness allowance and house rent allowance, HRA being computed as wages for payment of wages

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