Introduction – Compliance as a Business Risk
The expansion of work-from-home and hybrid work in India has transformed the way businesses operate—and how they handle payroll. Whether the workers are working from Bengaluru, Bhopal, or Bhubaneswar, businesses today must navigate the complexity of legal requirements in various states. With subtle deductions like EPF, ESI, TDS, and state-specific professional tax requirements, payroll has become more than a monthly routine—it’s a compliance nightmare.
This is where payroll software is used.
For Indian businesses that utilize remote or hybrid employees, spreadsheets or even manual procedures are no longer a viable choice. The stakes are too high: filing errors, outdated tax calculations, or non-compliance with labour laws can mean fines, unhappy employees, and erosion of their reputation.
Let’s see why modern payroll software in India is the foundation of compliance, automation, and productivity for distributed teams—and what’s next.
Recent Legal Updates (EPF, ESI, TDS, Gratuity)
Indian labor laws continue to evolve. The biggest challenge for distributed workforce companies is keeping up with these updates by regions. During 2025, there have been a few notable updates that have had an impact on payroll:
- EPF (Employees’ Provident Fund): New limits and electronic filing obligations
- ESI (Employees’ State Insurance): Salary cap thresholds revised
- Gratuity: It now applies to fixed-term workers in some industries
- TDS: Increased frequency of changes in tax slabs and surcharge rates
Lacking India payroll software solutions designed to auto-update rules and rates, companies face non-compliance and employee complaints.
How Automation Assists With Timely Filing
Manual payroll processing takes time and is prone to errors. Combine the complexity of remote workers working from different states, and the risk increases manifold.
Automated payroll software ensures:
- On-time EPF, ESI, and PT calculation and payment
- Instant challan and filing form generation
- Automatic due date reminders for submission
- Real-time synchronisation of salary and attendance data
- Direct bank integrations for disbursals
HR and finance teams, automation for you makes what would otherwise be a high-stress compliance drill an easy one. Remote teams don’t mean remote control—with payroll automation, you’re in full control.
Tax Slab Changes & TDS Recalculation Features
Indian income tax regimes today offer employees a choice between old and new regimes. Flexibility is wonderful for employees—but overwhelming for payroll administrators.
Payroll software of the new generation in India handles the complexity by:
- Allowing employees to select favored regimes via ESS (employee self service)
- Recalculating TDS on a monthly basis based on actual declarations
- Provisional and final tax estimate preparation
- Keeping pace with current slab rates, cess, and surcharges
It not only helps in more accurate payroll but also helps employees take money decisions when they are working from anywhere.
State-wise Professional Tax Compliance
Professional tax in India is, besides being state-specific, also salary slab-specific, gender-specific, and profession-specific in some states. It would be an absolutely impossible task to track, in case your workforce is spread across Maharashtra, Karnataka, Tamil Nadu, and West Bengal.
Payroll software India solutions come pre-configured with state-level PT rules and:
- Auto-deduct PT according to the work location of employees
- Facilitate location-based configuration for remote staff
- Automatically generate PT forms and returns for each applicable state
- Notify state-wise due date and rate change
For businesses expanding in size in India, this feature is a clincher for compliance with no micromanagement of tax regulations.
Auto-Generated Payslips & Form 16
With distance workforces, transparency in payroll has never been more important. Workers expect their payslips to be delivered in time, with breakdowns, and tax vouchers—electronically and securely sent.
Top payroll software in India offers:
- One-click generation of payslips and sending by email
- Format customization showing allowances, deductions, and net pay
- Auto-generation of Form 16 for TDS reconciliation and filing ITR
- Secure access via employee portals or mobile apps
This increases employee confidence and reduces the HR effort of handling payroll inquiries, especially across locations and time zones.
Monthly, Quarterly & Annual Compliance Reports
Compliance does not only mean salary payments. Companies must provide:
- Monthly: EPF, ESI, PT returns
- Quarterly: TDS returns (Form 24Q), e-TDS filing
- Annually: Form 16 distribution, payroll audit summaries
Without automation, it’s a logistical nightmare to track all this through distributed teams.
Payroll software provides:
- Compliance dashboards with future due dates
- Pre-filled reports with automatically calculated figures
- File-ready documents in government-required formats (such as XML, Excel, or PDF)
- Secure storage for 8+ years of compliance data
With this, finance teams can produce reports in minutes— even when offsite.
Payroll Software with Compliance Dashboards
Imagine if your payroll software warned you before you made an error.
That’s precisely what compliance dashboards in contemporary payroll software India solutions provide. Such smart features assist:
- Track filing deadlines and outstanding statutory payments
- Visualize missing employee KYC or invalid tax IDs
- Auto-flag non-conformant salary structures
- Display real-time compliance scores for your business
For hybrid and remote teams, these dashboards help bring much-needed visibility to decentralized payroll processes, ensuring leadership, HR, and finance remain on the same page.
Avoidance of Penalties through Smart Tools
In India, payroll non-compliance can result in fat penalties:
- ₹5,000–₹1,00,000 for delayed EPF deposits
- Interest and late fee on default of TDS
- State labor department notices due to incorrect PT deductions
- Gratuity disputes escalating to legal processes
Smart payroll software keeps you away from taking these risks with:
Automated statutory return validation
- Bank integration for timely payment of wages and tax
- e-verification workflows
- Audit trails and logs of all the payroll activities
- Notification and alerts for HR and finance stakeholders
For remote companies, these abilities ensure that geography is no longer a limitation on compliance.
What to Look Out For in 2026
Payroll’s future is all about predictive compliance and AI-driven governance. In 2026, expect to witness:
- AI-powered anomaly detection in salary disbursals
- Voice-directed payroll processing via virtual assistants
- Decentralized filing of compliance using blockchain audit trails
- Structuring of salaries real-time based on dynamic tax legislation
- Cross-border compliance modules for Indian teams working overseas
Adopting the latest payroll software in India today ensures that your company will be ready for the problems of tomorrow.
Conclusion: Remote Payroll Requires Intelligent Software
Remote and hybrid team payroll management in India is not just about paying salaries—it’s about staying compliant, keeping employees informed, and avoiding fines. Manual systems can’t keep up with different tax legislation, state-by-state nuances, and regulatory changes.
The right payroll software is a partner—not just an appliance. It automates from EPF filing to sending payslips, gets your books right, and lets your HR and accounting teams stress about strategy, not spreadsheets.
Whether you’re working with a remote workforce, the best choice you’ll make this year is choosing reliable, automated payroll software India.
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Introduction of TankhaPay Software
TankhaPay is a comprehensive workforce management solution developed by Akal Information Systems Ltd., offering digital payroll, HR, attendance, and social security services for India’s informal and formal sectors:
Brand owner
- Developed and operated by Akal Information Systems Ltd., an IT and staffing company with 20–25+ years of experience, headquartered in New Delhi, India
Key Features & Modules
1. Payroll Automation
- Automated salary structuring, advances, reimbursements.
- Flexi payout methods: self‑managed, hybrid, or fully automated, including salary disbursement and compliance filings
2. Attendance & Time Tracking
- Face‑recognition, geo‑smart tags, bulk attendance entry.
- Biometric/fingerprint sync and real‑time location capture for accurate tracking
3. Core HR / HRMS
- Includes recruitment and onboarding workflows.
- Applicant Tracking System (TankhaPay Recruit), asset management, HR letters, training & development, performance management, and reporting dashboards
4. Statutory Compliance
- Covers PF (Provident Fund), ESI, minimum wages, LWF, PT, TDS, gratuity, income tax and more.
- Simplifies government filings and ensures legal adherence
5. Employee Self-Service App
- Allows employees to verify KYC, mark attendance, download payslips, access PF/ESI details, apply for leave, request reimbursements and access helpdesk support
6. Service & Support
- A dedicated helpdesk and a designated Relationship Manager provide onboarding, training, technical and compliance support
Specialized Services & Integrations
- Payroll outsourcing, Employer‑of‑Record (EOR) services, NATS apprentice management, and more for flexible workforce management
- Integrates seamlessly with biometric devices, existing HR/ERP tools, and automated attendance hardware/software
TankhaPay’s Social Impact & Funding
- Marketed as India’s first social security app for gig, contract, and informal sector workers — enabling PF/ESI benefits through formalized payroll even if the employer lacks direct registrations
- Launched in April 2023, funded with ~USD 2.7 million by prominent Japanese investors aiming to expand its reach among MSMEs and e‑commerce platforms
Category | Highlights |
Developer | Akal Information Systems Ltd. |
Target Users | MSMEs, startups, enterprises |
Primary Functionality | HR + Payroll + Attendance + Compliance + Self‑service |
Compliance Coverage | PF, ESI, TDS, Minimum Wages, LWF, Professional Tax, etc. |
Key Modules | ATS, PMS, Training, Asset mgmt, Mobile app |
Support | Dedicated helpdesk, Relationship Manager, Training |
Special Use Cases | Gig/informal worker cover via EOR model |
Funding | USD 2.7M in June 2023 for expansion |