Flexible hours, 15% variable pay, WFH allowance, comp-off instead of monetary OT, ESOP perquisite valuation — and the new Section 392 TDS framework from FY 2026-27. The defaults match how Indian SaaS companies actually pay people.
Each row is a pain point we've heard from operators in this vertical — and the specific FastLegal Payroll feature that addresses it.
ProblemVariable pay sits in a separate Excel that nobody updates — until appraisal time when finance scrambles.
FastLegal solvesVariable Pay is a built-in salary component (default 15% of CTC). Pay it quarterly or annually via the Bonus Grant flow; engine annualises it for TDS automatically.
ProblemWeekend work creates a comp-off mess — Slack threads, no audit trail.
FastLegal solvesComp-off is a built-in leave type (1:1 against weekend/holiday work). Employees apply for it, managers approve, balance carries forward.
ProblemESOPs are taxed as perquisites on exercise but accountants don't know the Rule 3 valuation.
FastLegal solvesForm 12BA perquisite annexure has an ESOP/ESPP category. Workspace admin enters Value, Recovered and Taxable amount per employee per FY — auto-flows into Form 16 Part B.
ProblemUS-shift, UK-shift, India-shift engineers need different effective working hours but same payroll.
FastLegal solvesThree shift templates pre-loaded: General (9:30-18:30 IST), US shift (18:00-03:00 IST with night differential), UK shift (13:30-22:30 IST). Roster assignment doesn't affect base salary, only differential pay.
ProblemSection 392 / Form 130 transition is confusing — 1961 Act references everywhere in old templates.
FastLegal solvesWorkspace-level ITA 2025 toggle. From 1 April 2026, all PDFs cite Section 392 (salary TDS) and Section 393 (contractor TDS). Toggle off to keep 1961-Act language during your audit window.
ProblemInternet + WFH allowances for remote engineers need separate reimbursement tracking.
FastLegal solvesPre-loaded as non-taxable reimbursement components: Internet (₹1,000/mo default), WFH (₹2,000/mo default). Employees claim via portal, admin approves, payslip shows them clean.
Joining bonus, retention bonus, referral bonus, performance bonus, festival bonus — all configured as separate Bonus Types with their own tax treatment. Grant any of them ad-hoc or on a quarterly/annual cycle.
When an engineer exercises options, you need to record the perquisite value (FMV − exercise price) on Form 16. FastLegal has the Form 12BA annexure with the ESOP category pre-wired — and the engine treats it as a salary perquisite under Section 17(2).
The Income-tax Act, 2025 (effective 1 April 2026) restructures salary and contractor TDS into Sections 392/393 and renames Form 16 to Form 130. FastLegal handles the transition: workspace toggle picks the right framework, PDFs cite the right section.
FastLegal Payroll references each of these frameworks correctly in its payslips, PDFs and statutory exports.
Section 392 for salary TDS from 1 Apr 2026. Form 130 replaces Form 16.
Basic + DA ≥ 50% of CTC — auto-enforced on every salary structure.
State-wise: Karnataka, Maharashtra, Telangana most common for IT companies.
ESOP perquisite valuation on Form 12BA — Rule 3 category 13.
12% of basic capped at ₹15k. Optional International Worker category for expat employees.
Yes. The IT industry profile pre-loads three shift templates — General (IST 9:30-18:30), US shift (18:00-03:00 IST, night differential ₹40/hr), and UK shift (13:30-22:30 IST). Assign engineers to whichever shift their team works; payroll picks up night differentials automatically.
Variable Pay is a salary component set to 15% of CTC by default. To pay it out (typically quarterly), you create a Bonus Grant on the employee. The engine adds it to that month's earnings as a taxable line item and annualises it for TDS so withholding doesn't spike unnecessarily.
Add a Perquisite row on the employee's Form 12BA page for that financial year — pick the ESOP / ESPP category, enter the fair market value at exercise (Value), what the employee paid (Recovered), and we compute Taxable. The amount flows into Form 16 Part B and Form 12BA automatically.
Comp-off is the default OT model for IT companies — we ship it as a built-in Leave Type. Employee logs the weekend work, manager approves, balance shows in the portal. There's no monetary OT for IT staff by default (OT multiplier 1.0). You can switch any individual employee to monetary OT if needed.
Yes. Workspace has an Income-tax Act 2025 toggle (default on). From 1 April 2026, generated PDFs cite Section 392 instead of Section 192 and the form is titled Form 130. Toggle off if your CA wants to keep 1961-Act references during the audit-window for older payslips.
Create a workspace, bootstrap the standard Indian defaults (leave types, salary structure, holidays for two years), add your first employee, and run May payroll — all before your evening chai.