What is the citeria of PF deduction as in if the monthly salary of an employee is more than Rs. 6500, is deduction of PF an optional thing at the option of the employee whether he wants to get it deducted or not? or is it mandatory to deduct the PF by the company?
Please tell me the relevant section to support the reply as my company is not deducting any PF in a few cases for the employees having a salary of more than Rs. 6500 and in few other cases, dedcuting PF on a flat salary of 6500 irrespective of how higher the basic salary of the employee is..
Please reply through some reference to the relevant section.
From India, Chandigarh
Please tell me the relevant section to support the reply as my company is not deducting any PF in a few cases for the employees having a salary of more than Rs. 6500 and in few other cases, dedcuting PF on a flat salary of 6500 irrespective of how higher the basic salary of the employee is..
Please reply through some reference to the relevant section.
From India, Chandigarh
19
Means an employee who is working in an establishment which falls under the PF act, but whose salary is more than Rs. 6500 has an option to get or not to get the PF deducted at all?
Can you please tell me the relevant section or para in the Act to support this???
From India, Chandigarh
Can you please tell me the relevant section or para in the Act to support this???
From India, Chandigarh
The ceiling of Rs.6500 is for Employees Pension Scheme, 1995 which is linked to the PF. There is no ceiling for PF. Employees drawing pay more than Rs.6500 per month are also entitled to become member of PF and get benefit of 12% equivalent share to their respective PF accounts from the employer. There is no option for any individual employee to opt out of the PF. It is compulsory for all employees.
The ceiling of Rs.6500 is for Employees Pension Scheme, 1995 only. However, the employees drawing salary more than Rs.6500 will have to contribute maximum 8.33% of Rs.6500 that is Rs.541. In short, all employees drawing salary of Rs.6500 or more, will only contribute Rs.541 maximum to the EPS 1995. This amount is to be deducted from 12% subscription to the PF. (Every employee will subscribe 12% of his basic + dearness allowance+dearness pay if any to the PF. Out of this amount, 8.33% will go to EPS and the remaining to his PF account. For example, if any employee is drawing basic + dearness allowance amounting to Rs.6500 per month, an amount of 12% will be deducted from his salary towards PF and EPS subscription. 12% of 6500 works out to Rs.780. 8.33% works out to Rs.541. This means out of Rs.780 deduction, Rs.541 will go to EPS 1995 and Rs.239 will go to PF account of the employee. The employer will contribute Rs.780 and the entire amount will go PF (employer's contribution account) of the PF.
If the salary is more than 6500, EPF subscription will be maximum Rs.541. Remaining amount will go to PF.
Shyam Agrawal of Pune
From India, Pune
The ceiling of Rs.6500 is for Employees Pension Scheme, 1995 only. However, the employees drawing salary more than Rs.6500 will have to contribute maximum 8.33% of Rs.6500 that is Rs.541. In short, all employees drawing salary of Rs.6500 or more, will only contribute Rs.541 maximum to the EPS 1995. This amount is to be deducted from 12% subscription to the PF. (Every employee will subscribe 12% of his basic + dearness allowance+dearness pay if any to the PF. Out of this amount, 8.33% will go to EPS and the remaining to his PF account. For example, if any employee is drawing basic + dearness allowance amounting to Rs.6500 per month, an amount of 12% will be deducted from his salary towards PF and EPS subscription. 12% of 6500 works out to Rs.780. 8.33% works out to Rs.541. This means out of Rs.780 deduction, Rs.541 will go to EPS 1995 and Rs.239 will go to PF account of the employee. The employer will contribute Rs.780 and the entire amount will go PF (employer's contribution account) of the PF.
If the salary is more than 6500, EPF subscription will be maximum Rs.541. Remaining amount will go to PF.
Shyam Agrawal of Pune
From India, Pune
Thanks Shyam, that was a valuable piece of information. But somewhere i think there is still a disconnect to when you are saying that "There is no option for any individual employee to opt out of the PF. It is compulsory for all employees. "
I think this is not what is practically being followed, I am an auditor and see many clients, now at a few places have seen that company has made it mandatory for all employees to get their PF deducted irrespective of their salary, and at some places, it is at the discretion of the employee having a salary of more than Rs. 6500 to get or not to get their PF deducted. That is what the whole confusion is all about.
I am not able to get a concrete text or section in the Act to support any of the view firmly.
If you can please help out with the relevant para or section in the Act through which i can form my opinion, i'll really be very thankful to you.
From India, Chandigarh
I think this is not what is practically being followed, I am an auditor and see many clients, now at a few places have seen that company has made it mandatory for all employees to get their PF deducted irrespective of their salary, and at some places, it is at the discretion of the employee having a salary of more than Rs. 6500 to get or not to get their PF deducted. That is what the whole confusion is all about.
I am not able to get a concrete text or section in the Act to support any of the view firmly.
If you can please help out with the relevant para or section in the Act through which i can form my opinion, i'll really be very thankful to you.
From India, Chandigarh
Dear Mr. Shyam Agrawal,
very good posting. Thanks. I humbly feel that the words "Employee" and "Employer" should have been interchangeably used in your mail. I think only employer contributes towards EPS account @ 8.33% (maximum Rs. 541.00 per month) and 3.67% (maximum Rs.239.00) in EPF account. Employees are exempted to contribute any amount to EPS & EDLI Scheme under Employees Provident Fund and Miscellaneous Provisions Act-1952 whether drawing Rs. 6500.00 or more per month as PF salary. The employees contribute their 12% or 10% as the case may be, PF salary to EPF account only.
Please rectify my views if I'm wrong.
Thanks
R.K. SINGH
From India, Delhi
very good posting. Thanks. I humbly feel that the words "Employee" and "Employer" should have been interchangeably used in your mail. I think only employer contributes towards EPS account @ 8.33% (maximum Rs. 541.00 per month) and 3.67% (maximum Rs.239.00) in EPF account. Employees are exempted to contribute any amount to EPS & EDLI Scheme under Employees Provident Fund and Miscellaneous Provisions Act-1952 whether drawing Rs. 6500.00 or more per month as PF salary. The employees contribute their 12% or 10% as the case may be, PF salary to EPF account only.
Please rectify my views if I'm wrong.
Thanks
R.K. SINGH
From India, Delhi
Dear All
I wish to concolidate the above as follow.
The employee / employer has a opition to cover a employee whose salary is Rs.6500/- or more only at the time of appointment. Once an employee is covered under the PF he does not have the opition of excemption under PF. (i.e, if an employee on joining the fund has a salary less than Rs.6500/- he is covered under PF, later when his salary crosses Rs.6500/- he continues to be covered under PF, provided he can restrict his contirbution to Rs.6500/- for both PF and Pension scheme).
The employee contributes only to PF, it is only the employer who contributes to PF, Pension scheme, EDLIS, Administraion charges.
The employer has an option to restrict his contribution to Rs.6500/- in spite the employee contributes to more.
12% of salary is contributed to PF by the employee and this percentage can be more and decided by the employee if he want to contribute to voluntary PF.
As per the sec 2(f) of the Act, these employees are excempted employees.
for further details mail me at
R. Alex Antony
HR Soluitons
Chennai
98412 10995
From India, Madras
I wish to concolidate the above as follow.
The employee / employer has a opition to cover a employee whose salary is Rs.6500/- or more only at the time of appointment. Once an employee is covered under the PF he does not have the opition of excemption under PF. (i.e, if an employee on joining the fund has a salary less than Rs.6500/- he is covered under PF, later when his salary crosses Rs.6500/- he continues to be covered under PF, provided he can restrict his contirbution to Rs.6500/- for both PF and Pension scheme).
The employee contributes only to PF, it is only the employer who contributes to PF, Pension scheme, EDLIS, Administraion charges.
The employer has an option to restrict his contribution to Rs.6500/- in spite the employee contributes to more.
12% of salary is contributed to PF by the employee and this percentage can be more and decided by the employee if he want to contribute to voluntary PF.
As per the sec 2(f) of the Act, these employees are excempted employees.
for further details mail me at
R. Alex Antony
HR Soluitons
Chennai
98412 10995
From India, Madras
Hi all, I want to put some light on the exemption part. If the new joinee does not have the membership of the PF with his previous employer or he / she is fresher then only he had the option whether to join PF or not if his wages/ Basic plus DA more then 6500/-pm. but if he/she was the member of the PF in the previous employment then there is no option left with any of them for the exemption. The amount can be upto 6500/- but he/she/employer has to make sure about the pf membership. In the exemption support employer should get filled up form 11 from the new joinee, i.e. the declaration from the new employee that he was not a member of the PF in hie/her previous employment.
My openion is, employer should make compulsory to all the employees to be member of the PF and not find the options. HR person very well convince the new comer about the compulsory saving with high rate of interest available in pf membership. the employer cost is very well put in ctc of the individual.
Whatever i said above is with proof and legal openion in writting with the noted advocates of pune, so i dont think there is any mistake in the same.
thanks
Ramesh
From India, Mumbai
My openion is, employer should make compulsory to all the employees to be member of the PF and not find the options. HR person very well convince the new comer about the compulsory saving with high rate of interest available in pf membership. the employer cost is very well put in ctc of the individual.
Whatever i said above is with proof and legal openion in writting with the noted advocates of pune, so i dont think there is any mistake in the same.
thanks
Ramesh
From India, Mumbai
Hello Sir,
Presently I am working in leading cement Industry, Employee’s Compensation Act’(Amendment)2009, No.45 of 2009, December 23 ,2009. Weather this amendment is applicable to our employees or not.
Please clarify my dought.
S VENKATESWARLU
e_mail :
From India, Hyderabad
Presently I am working in leading cement Industry, Employee’s Compensation Act’(Amendment)2009, No.45 of 2009, December 23 ,2009. Weather this amendment is applicable to our employees or not.
Please clarify my dought.
S VENKATESWARLU
e_mail :
From India, Hyderabad
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