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Under the first proviso to the definition of "wages" in section 2(y) of the Code on Wages, 2019, what…

The first proviso to section 2(y) says the amount by which the excluded payments exceed one-half "shall be deemed as remuneration and shall be accordingly added in wages".…

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Under the first proviso to the definition of "wages" in section 2(y) of the Code on Wages, 2019, what happens if the payments excluded from wages under clauses (a) to (i), such as house rent allowance and conveyance allowance, exceed one-half (or such other per cent as the Central Government notifies) of all remuneration?

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The first proviso to section 2(y) says the amount by which the excluded payments exceed one-half "shall be deemed as remuneration and shall be accordingly added in wages". This stops employers from keeping basic pay artificially low by shifting pay into allowances. The employer is not required to cut the allowances themselves.

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