India EOR Glossary · Versatile

India EOR glossary.

The full vocabulary of India hiring, Employer of Record, payroll, and statutory compliance. Plain language definitions, updated for FY 2025-26.

4 yrs On the books

47 Engineers paid · Apr 2026

14 US/UK companies on the entity

0 Notices since founding

Foo Falcon Pvt Ltd · CIN U72900KA2022PTC163007 · Incorporated 28 Jun 2022

India operations has its own vocabulary.

Most India operations terminology has no clean US/UK equivalent. PF, ESIC, gratuity, professional tax, UAN, LUT, TDS, Form 16, Form 12BB, Section 80C, Section 80CCD(1B), Shops & Establishments, Industrial Relations Code. The list runs to about forty terms that show up in every Versatile engagement. This page defines all of them in plain language, with the statutory reference where it applies.

PF / EPFO

Provident Fund / Employees' Provident Fund Organisation. Statutory retirement savings scheme. 12% from employee + 12% from employer on basic + DA. Versatile runs an exempt PF Trust under Section 17 of the EPF Act.

ESIC

Employees' State Insurance Corporation. Statutory health insurance scheme for employees with gross under ₹21K/month. 0.75% employee + 3.25% employer. Most senior bands sit above the threshold so ESIC does not apply, but eligibility is re-checked on every salary revision.

Gratuity

Statutory severance payout under the Payment of Gratuity Act 1972. Accrued at 4.81% of basic per month. Payable on exit after 4 years + 240 days of continuous service. Capped tax-exempt at ₹20 lakh.

Professional Tax (PT)

State-level tax on employment income. Karnataka ₹200/mo. Maharashtra slab-based up to ₹2,500/year. Each state has its own portal and acknowledgement IDs. Versatile holds registrations in nine states.

TDS

Tax Deducted at Source. Income tax withheld monthly by the employer against the employee's annualised income. Quarterly e-TDS return (Form 24Q) filed by the employer. Annual reconciliation against Form 26AS.

Form 16

Annual TDS certificate issued by employer to employee by 31 May each year for the prior financial year. Generated via the TRACES portal. Includes the salary breakdown, deductions, and TDS paid.

Form 16A

Quarterly TDS certificate for non-salary payments (e.g., contractor payments). Issued by the payer to the recipient via TRACES.

Form 12BB

Investment declaration form submitted by employees to their employer for the financial year. Captures Section 80C, 80D, 80CCD(1B), HRA, and other deductions for accurate TDS computation.

UAN

Universal Account Number. Lifelong PF identity for every Indian employee. Survives employer changes if transfers are filed correctly. Versatile preserves UAN continuity on every EOR-to-EOR migration.

LUT

Letter of Undertaking. GST registration that allows zero-rated services exports. Renewed annually. Versatile holds an active LUT for cross-border invoicing.

GST / GSTR-1 / GSTR-3B

Goods and Services Tax. Indirect tax on goods and services. GSTR-1 is monthly outward supplies return; GSTR-3B is consolidated monthly summary. Versatile files both for every applicable invoice.

Section 80C

Income Tax Act deduction for specified investments. ₹1.5 lakh annual ceiling. Includes PF, ELSS, PPF, NSC, life insurance premiums, home loan principal. Old Regime only.

Section 80CCD(1B)

Additional NPS deduction. ₹50,000 annual, on top of Section 80C. Old Regime only. Saves ₹15,600 per year at the 31.2% slab.

Section 80CCD(2)

Employer NPS contribution exemption. Up to 10% of basic+DA. Available in both Old and New Regimes.

Shops & Establishments Act

State-level legislation governing working hours, leave, employment terms. Every state has its own variant. Versatile holds Shops & Establishments licences in nine states.

Industrial Relations Code 2020

Consolidated labour code that replaces three older statutes (Trade Unions Act, Industrial Employment Act, Industrial Disputes Act). Tightens contractor classification tests. Notified partially.

Code on Wages 2019

Consolidated labour code that replaces four older wage statutes. Defines minimum wage, equal remuneration. Notified partially.

Social Security Code 2020

Consolidated labour code that replaces nine older social security statutes (PF, ESI, gratuity, maternity, etc.). Notified partially.

Maternity Benefit Act

Mandates 26 weeks paid maternity leave. Versatile absorbs full backfill cost during leave; no adjustment to customer invoice.

POSH

Prevention of Sexual Harassment at the Workplace Act 2013. Requires Internal Committee constitution, annual returns, mandatory training. Versatile handles all POSH compliance.

Item	Versatile handles
Total terms covered on this page	20 (core) + 20 secondary in full reference
Updated for	FY 2025-26
Statutory references	Cited per term
Plain language	Yes (no jargon for jargon's sake)

Item

Versatile handles

Total terms covered on this page

20 (core) + 20 secondary in full reference

Updated for

FY 2025-26

Statutory references

Cited per term

Plain language

Yes (no jargon for jargon's sake)

Questions we hear most.

Why does India have so many statutory terms?

India's statutory framework was built piece-by-piece over decades, with different statutes for PF (1952), ESI (1948), gratuity (1972), professional tax (state-specific, various dates), and so on. The 2019-2020 Labour Codes consolidate 29 older statutes into 4 codes but the rules have not been fully notified yet. Until they are, the older vocabulary remains in operational use.

Is this glossary updated as statutes change?

Yes. We re-check quarterly against statutory notifications. The day the Labour Codes are fully notified, this glossary updates overnight.

Can I link to specific terms from external content?

Each term has an anchor link. Hover over the term header to copy the anchor URL.

Where can I learn more about a specific term?

Each term links to the relevant Versatile service page (e.g., PF links to /managed-payroll/, professional tax links to /payroll-in-india/). The linked pages have the operational-depth explanation.

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India EOR glossary.

India EOR tailored to your home country.

India operations has its own vocabulary.