Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Accident on duty

bobby (Manager Accounts) (44 Points)

22 September 2010

An employee of our company working as a Mechanic ( his monthly salary was 9500/- per month) He met with an accident while repairing a machine at customer site. A few days later unfortunately he passed away in a hospital.

Now after discussion with his family our company has decided to pay a lump sum Rs. 10 lac in the name of his daughter ( he was survived with his wife and a daughter)

Plz give your Valuable opinion ..

1. What will be the accounting treatment in the books of the company? Is it allowed as an expense?

2. What are Legal issues or formalities or documentation required?

Reply
Follow
Share

2 Replies

Kannan Iyappan (Company Secretary) (1496 Points)
Replied 22 September 2010

Accounting treatment is in other hand. Please check the following as the leagl issues....

1.Is it your organisation covered under ESI Act ??? if Yes,

2.The worker will be under ESI Coverage ( Salary limit is 15000 )

3.Check the remittence against his name & file application with ESI authorities . ( The person may get additional benifit from ESI apart from your company compensastion )

4.If your organization is not covered under ESI Coverage . Please check your client , they may be covered with ESI ( As you said , the worker was done work at some customer place ).

I think may be useful to you.

Thanks

Kannan