How it Benefits The Company

Legally Company is not in default but the employee can be, so the company is not defaut.

Also the employee can't do case against the company.

Dear Mahesh 

the only benefit to the company is that comapny can show salary expenses of rs. 30000 pm instead of 7000/- 

such type of practice is done by many schools and small companies/ organisations.to save tax.

but this is wrong practice....

it is for tax evasion?????

and dear mahesh by doing this company is saving tax but ur frnd will be liable for paynig tax b'coz  his income is in the eyes of law is 30000 instead of 7000 pm.

Thanks to all, but he was appointed in company on August 2013 and this is first time company done this, so by giving only 1 cheque on 31/03/14 will make assumption that company paying that much amount monthly OR this is any YEAR ENDING Adjustment?  
 

but a truth is also we know that in india one can not have its own his house during his life tym by his original white income.....bcoz the tax system fo india......

so the if snake should live than rat should be killed......its lfie,,,,,,

Now I understand the thing clearly........Thank You All for your Inputs......