Statutory compliance checklist
Statutory Compliance Checklist for Businesses in 2025
In this post, we will discuss statutory compliance for companies in 2026. From labour rules to tax filing and GST requirements, we have covered the most important areas for businesses to remain compliant and avoid penalties.
Let’s look at each section in detail:Â
Introduction
Statutory compliance is an important responsibility for every business, whether it is a small business, a startup, or a large company. Businesses must follow various labour laws, tax laws, and other legal requirements to avoid penalties, legal issues, and business disruptions.
Keeping track of different due dates, filings, and changing regulations can be difficult, especially as a business grows. A statutory compliance checklist makes this easier by helping HR, payroll, finance, and compliance teams stay on top of all legal requirements and complete them on time.
Quick Statutory Compliance Checklist:
- Monthly: Deposit EPF, ESI, TDS, and Professional Tax (where applicable), process payroll, and maintain payroll records.
- Quarterly: File TDS returns and review compliance records.
- Half-Yearly: Pay Labour Welfare Fund (where applicable) and review employee and statutory documents.
- Annual: File annual returns, pay statutory bonus (if applicable), and renew licences and registrations.
- Event Based: Complete statutory formalities whenever an employee joins or leaves the organisation, or during inspections by government authorities.
key changes in 2026
Recent labour law changes are aimed at making compliance simpler for both employers and employees. Some of the important updates are:
- The four Labour Codes have been introduced to simplify wage, social security, industrial relations, and workplace safety laws.
- Companies may need to revise their salary structure to meet the new rules on basic pay and overtime.
- The Social Security Code extends statutory benefits to gig and platform workers, including benefits such as maternity support, health insurance, and pension schemes.
- The ESIC dispute resolution scheme has been extended through 2026, giving employers more time to settle pending issues related to contributions, interest, and penalties.
What is Statutory Compliance?
Statutory compliance conforms to the legal norms and regulations established by national and state governments. In human resources and payroll, this means following up on all employment-related rules and guaranteeing proper employee benefits and salary management.
It is the government’s legal framework for regulating how firms run, particularly regarding employee management and financial accountability.
Regardless of size or industry, every company is expected to follow these labour regulations. Noncompliance might result in significant legal consequences and penalties.
Why is Statutory Compliance Important?
Statutory compliance is important because it protects the interests of both employees and employers. It helps businesses follow the law while creating a fair, safe, and well-managed workplace.
For Employees
Statutory compliance ensures that employees receive the rights and benefits they deserve. It helps by providing:
- Fair wages as per applicable laws
- Equal treatment at the workplace
- Reasonable working hours and leave benefits
- Social security benefits such as EPF, ESI, and gratuity
- A safe and healthy working environment
- Protection against unfair employment practices
For Employers
Following statutory compliance also benefits employers in many ways. It helps them:
- Avoid penalties, fines, and legal action
- Reduce employee disputes and labour-related issues
- Build trust among employees
- Maintain proper payroll and employment records
- Improve the company’s reputation and credibility
- Ensure smooth business operations
Importance of Statutory Compliance in Payroll
Payroll is one of the most important areas where statutory compliance plays a key role. It helps businesses:
- Calculate salaries and statutory deductions correctly
- Deposit EPF, ESI, TDS, and other statutory payments on time
- File statutory returns within the prescribed due dates
- Maintain accurate payroll records for audits and inspections
- Ensure employees receive their salary and statutory benefits without delays
Detailed Statutory Compliance Checklist in India
Staying compliant with laws and regulations is a must for every business. Here’s a simplified checklist of key areas to focus on in 2025:
1. Labour Laws & Employment Rules
- Adapting to hybrid work: Update your policies to reflect remote and flexible work setups.
- Fair pay and records: Ensure all employees are paid fairly and work hours are properly tracked.
- Employee rights: Review contracts and policies regularly to align with current labour laws.
2. Tax Compliance
- Going digital: Embrace digital platforms for filing taxes.
- Accuracy and timeliness: Use reliable software to avoid errors and meet deadlines.
- Stay updated: Changes in tax rules should be monitored and implemented as soon as possible.
3. Health & Safety Measures
- Safer workspaces: Follow updated health and safety rules.
- Hygiene and mental health: Implement cleaning routines and provide mental health support.
- Be ready: Set up clear emergency procedures to handle unexpected situations.
4. Data Protection & Privacy
- Secure data: Use strong systems to store and protect user and employee information.
- Get consent: Always ask for permission before collecting personal data.
- Update policies: Check if your privacy policies meet current legal requirements.
5. Compliance Best Practices
- Routine checks: Conduct regular audits to detect and correct problems earlier.
- Train your team: Educate employees on the latest rules and their role in staying compliant.
- Use compliance tools: Reliable software can be used to automate processes such as record-keeping and deadline tracking.
6. Goods and Services Tax (GST) Compliance
- New Invoice Series: From April 1, 2025, create a new invoice series for all transactional records, including tax invoices and credit notes.
- Letter of Undertaking (LUT): If you are exporting goods or services without paying GST, file the LUT for the financial year 2025-26. ​
- E-Invoicing Requirements: For businesses with a turnover exceeding ₹5 crore generating e-invoices is mandatory.
7. Corporate Governance
- Annual General Meeting (AGM): Conduct an AGM within six months from the end of the financial year or by September 30, whichever is earlier. ​
- Board Meetings: Conduct at least four board meetings every year, with a gap of no more than 120 days between meetings. ​
- Director KYC: Directors must complete their KYC verification annually to maintain accurate company records.
8. Foreign Exchange Management Act (FEMA) Compliance
- Annual Return on Foreign Liabilities and Assets (FLA Return): Submit this by July 15 if applicable.
- Form FC-GPR: Report any foreign direct investment to the Reserve Bank of India within 30 days of allotment of shares.
9. Product Certifications
- Bureau of Indian Standards (BIS) Compliance: Ensure products meet the latest BIS certifications, especially with new regulations in 2025.
10. Environmental and Safety Regulations
- Environmental Clearances: Obtain necessary environmental clearances for operations, ensuring adherence to sustainability norms.
- Machinery and Equipment Safety: Comply with the Omnibus Technical Regulation Order, 2024, for machinery and electrical equipment safety.
Consequences of Non-Compliance
Avoiding statutory compliance might have major consequences for your company. Here are the main risks you should be aware of:
- Fines and Legal Penalties
Failure to follow the law can result in significant fines and legal action, which can have a financial and operational impact on your firm. - Damage to Brand Reputation
Noncompliance might damage your company’s reputation. Once lost, customer and partner trust is difficult to rebuild. - Loss of Customer Loyalty
People prefer trustworthy businesses. If your organization is considered as irresponsible, you may lose loyal clients. - Productivity and Revenue Loss
Compliance difficulties frequently disrupt operations, resulting in delays, decreased efficiency, and loss of income. - Government Sanctions In important situations, the government may apply a penalty or even suspend your business license, resulting in operational shutdowns.
Monthly Statutory Compliance Checklist
| Compliance | Applicable Law | Due Date | Applicability |
| TDS Deposit | Income Tax Act | 7th of the following month | All TDS deductors |
| PF Contribution Deposit | EPF Act | 15th of the following month | Firms with 20 or more employees |
| ESIC Contribution Deposit | ESI Act | 15th of the following month | Firms with 10 or more employees |
| GSTR-1 Filing | GST Law | 11th of the following month | Monthly filers with a turnover above ₹5 crore |
| GSTR-3B Filing | GST Law | 20th of the following month | Monthly filers |
| ECR Filing (PF) | EPF Act | 15th of the following month | All PF-registered establishments |
| Professional Tax Deposit | State Professional Tax Act | Varies by state (typically monthly) | States where Professional Tax is applicable |
| Payroll Processing | Multiple laws | On or before the salary date | All employers with employees |
Quarterly Compliance Checklist
Some of the important quarterly compliances are:
- TDS Returns: File Form 24Q for salary payments and Form 26Q for non salary payments within 31 days from the end of each quarter.
- Advance Tax: Pay advance tax in instalments. 15% by 15 June, 45% by 15 September, 75% by 15 December, and 100% by 15 March.
- Board Meetings: Companies are required to hold at least one board meeting every quarter. The gap between two meetings should not be more than 120 days.
- ESIC Half Yearly Returns: File the return for the April to September period by 12 November, and for the October to March period by 12 May.
Annual Compliance Checklist
At the end of the financial year:
- Issue Form 16.
- Complete annual tax reconciliations.
- Update employee records.
- Conduct statutory compliance audits.
- Review labour law compliance.
- Prepare for financial audits.
Conclusion
In 2026, every company must ensure statutory compliance. This updated compliance checklist will help you remain on top of the current standards. Compliance is about more than just avoiding penalties; it also builds trust, boosts employee morale, and promotes long-term corporate growth.
With that, we conclude this post. Please leave any questions or comments in the space below; we will gladly answer them.
FAQs
1. What is statutory compliance?
Statutory compliance means following all the laws and rules that apply to a business. This includes complying with tax laws, labour laws, payroll regulations, and filing the required returns on time.
2. Who is responsible for statutory compliance in an organisation?
The responsibility for statutory compliance depends on the organisation. It is usually handled by the HR, payroll, finance, accounts, or compliance team. In small businesses, the business owner may be responsible for it.
3. Why is a statutory compliance checklist important?
A statutory compliance checklist helps businesses keep track of all legal requirements and due dates. It reduces the chances of missing a filing, avoids penalties, and makes audits easier to manage.
4. What are the major statutory compliances for employers in India?
Some of the common statutory compliances for employers include EPF, ESI, Professional Tax, TDS, GST, minimum wages, bonus, gratuity, labour law compliance, and payroll compliance.
5. How can software help with statutory compliance?
Statutory compliance software makes compliance easier by automating calculations, reminding you about due dates, generating statutory reports, maintaining records, and reducing manual errors. This saves time and helps businesses stay compliant.
