Payroll & TDS
Run payroll at /dashboard/payroll for any supported jurisdiction — a shared dispatcher routes each run through the right country engine. This chapter covers the run itself, the India Labour Codes rules baked into it, and the full India TDS/TCS stack: rate chart, quarterly returns, challan matching, Form 16, TRACES, and 26AS/AIS reconciliation. Everything from the TDS sections down is India-specific.
Payroll runs
/dashboard/payrollworks the same way in every jurisdiction: pick the period, review the computed pay register, and approve. Under the hood, a shared dispatcher hands the computation to your jurisdiction’s engine — statutory deductions, employer contributions, and payslip lines all come from the country rules, not generic formulas. Payroll approval is one of the actions the AI agent always queues for human sign-off (see AI in OnGravy).
India under the Labour Codes (from Nov 2025)
India payroll implements the Labour Codes regime in force since November 2025:
- SS-Code wages with the 50%-floor add-back. PF and gratuity are computed on Social Security Code wages: if basic-plus-dearness falls below 50% of total remuneration, the shortfall is added back to the wage base. Payslips carry an explanatory note so employees can see why the PF base is what it is.
- EPF ceiling ₹15,000, with the mandatory employee share capped at ₹1,800/month — and a voluntary opt-in for employees who want to contribute above the cap.
- Fixed-term employees earn gratuity at 1 year of service, not five.
- Overtime at 2× beyond 48 hours/week, with warnings as anyone approaches the 144-hours-per-quarter cap.
- HRA metro list — the 8-city metro list applies for FY 2026-27 HRA computation.
TDS rate chart — old and new section numbers
The CA-verified rate chart at /dashboard/tds-rate-chart shows the new Income-tax Act 2025 section numbers alongside the legacy ones — for example 194C → 393(1) — applicable for Tax Year 2026-27. Deduct under whichever numbering your counterparty quotes; the chart keeps both visible so nothing gets mis-mapped during the transition.
Quarterly TDS returns
Prepare quarterly returns at /dashboard/tds-returns, including FVU generation for upload. From Tax Year 2026-27 the familiar form names are renamed:
| Legacy form | Covers | Name from TY 2026-27 |
|---|---|---|
| 24Q | TDS on salaries | Form 138 |
| 26Q | TDS on non-salary resident payments | Form 140 |
| 27Q | TDS on payments to non-residents | Form 144 |
| 27EQ | TCS | Form 143 |
OnGravy selects the right naming for the tax year you are filing — file a TY 2025-26 quarter and you get the legacy names; file TY 2026-27 and you get the new ones.
Challans — auto-match and pre-filled ITNS-281
- Challan ⇄ deductee auto-match: deposits are matched to deductee entries per-section on a FIFO basis, and any short deposit is flagged before filing — not discovered as a TRACES default afterwards.
- Pre-filled ITNS-281 challan PDFs: the payment challan comes pre-filled from your deduction data, ready to pay.
Form 16 / Form 130
Annual TDS certificates for employees are generated per financial year. Form 16 is renamed Form 130 under the new Act — OnGravy auto-selects the correct form by the FY you are generating for, so certificates always carry the name valid for that year.
TRACES cockpit and 26AS/AIS reconciliation
/dashboard/tds-traces— a cockpit for your TRACES workflows in one place./dashboard/form26as-reconcile— import your 26AS/AIS and reconcile it against your books, so credits claimed and credits reported by deductors agree before return time.
TCS returns
TCS quarterly returns (legacy 27EQ, Form 143 from TY 2026-27) are prepared in the same /dashboard/tds-returns flow. Note the deadline change: from TY 2026-27, TCS returns are due at month-end — earlier than the old schedule, so the compliance calendar entries shift accordingly.
Gotchas & good to know
- The PF base can exceed basic pay. The 50%-floor add-back means employees with allowance-heavy structures see a higher PF base than their basic — the payslip note exists to preempt exactly this question.
- Two section numberings coexist during the IT Act 2025 transition. When a vendor or bank quotes a section, check the rate chart for the mapping before assuming a mismatch.
- Form names change with the tax year, not the calendar. A late-filed TY 2025-26 quarter still uses legacy names even if you file it in 2026-27.
- Fix short deposits before filing. The per-section FIFO match flags them upfront; filing anyway converts a fixable gap into a default notice.
- TCS month-end due dates from TY 2026-27 — if your routine was built around the old dates, re-anchor it.
- Overtime warnings are advisory — OnGravy warns as staff approach the 144 hours/quarter cap; scheduling within it is on you.