Hi All,
Can anyone give answer on following questions related to PF
1) What is the minimum contribution that employer and employee has to make?
2) If any organisation is less then 20 people, then how they an avail PF benefit
3) What do you mean by putting cap on PF contribution?
I need details on PF. As, my organisation is planning to start this benefit. But as of now we are only 10 people in strength.
Regards,
Gunjan
From India, New Delhi
1Can anyone give answer on following questions related to PF
1) What is the minimum contribution that employer and employee has to make?
2) If any organisation is less then 20 people, then how they an avail PF benefit
3) What do you mean by putting cap on PF contribution?
I need details on PF. As, my organisation is planning to start this benefit. But as of now we are only 10 people in strength.
Regards,
Gunjan
From India, New Delhi
1. The minimum contribution that both employer and employee has to make is 12% of the your wages (Basic + DA) each. Of which 8.33% of the employer's contribution will go to the Pension fund subject to a maximum of Rs. 541/-.
2. The EPF Act, 1952 stipulates that you have to necessarily subscribe to PF if your employee strength exceeds 20. But there is no restriction even if the employee strength is less than 20; you can register with PF authorities and take membership for your employees. But once you have registered with PF you cannot revert.
3. I'm afraid I didnt understand "the putting cap on PF contribution"
From India, Pune
2. The EPF Act, 1952 stipulates that you have to necessarily subscribe to PF if your employee strength exceeds 20. But there is no restriction even if the employee strength is less than 20; you can register with PF authorities and take membership for your employees. But once you have registered with PF you cannot revert.
3. I'm afraid I didnt understand "the putting cap on PF contribution"
From India, Pune
Hai, Can i know what are the forms to be submitted to the PF Office for Closing of PF, PF Loans, Transfer of PF account to Another acount. Vasanthi Chennai
Hai Kanaka, This is Vasanthi, thanks for the information. Can i have your mail id and your full details ie where you r working in chennai. Awaiting for your reply Vasanthi Cell No: 98408 63066
Hi Gunjan,
Gautam & Niranjas have already answered your questions & both of them have put in their explanations in a very nice way. To answer your last question on the Cap on PF contribution: You are aware that the minimum contribution both from employer / employee side is 12% . The contribution is restricted that is the limit is Rs. 6500/- . For example let us say that X employee is drawing the basic salary of Rs.10000/- then while calculating thhe consolidated PF contribution then his basic salary will be calculated on the basis of Rs. 6500/- (not Rs.10000/-) & the ceiling limit is Rs. 541/-
Understand one thing here: Dont get confused !!! The 12% of the employer's contribution is divided into 8.33% & 3.67% so if the bsic salary is 7000/- & the contribution is 840 then it will be divided as 541 and 299. Hope you have understood.
Regards,
Sadashiv Rao 8)
From Kuwait, Kuwait
Gautam & Niranjas have already answered your questions & both of them have put in their explanations in a very nice way. To answer your last question on the Cap on PF contribution: You are aware that the minimum contribution both from employer / employee side is 12% . The contribution is restricted that is the limit is Rs. 6500/- . For example let us say that X employee is drawing the basic salary of Rs.10000/- then while calculating thhe consolidated PF contribution then his basic salary will be calculated on the basis of Rs. 6500/- (not Rs.10000/-) & the ceiling limit is Rs. 541/-
Understand one thing here: Dont get confused !!! The 12% of the employer's contribution is divided into 8.33% & 3.67% so if the bsic salary is 7000/- & the contribution is 840 then it will be divided as 541 and 299. Hope you have understood.
Regards,
Sadashiv Rao 8)
From Kuwait, Kuwait
Dear Mr.Sadashiv Rao,
For your information the cap of 6500 (restricted salary) for contribution in Pension scheme has been removed in 1999. I beleive there was an article in Times of India on this. Now the employee, whose basic is more than 6500 may contribute more than 541 into his Pension fund and draw a better pension at the end of his service.
You may check this out with your regional provident fund commissioner.
For your information the cap of 6500 (restricted salary) for contribution in Pension scheme has been removed in 1999. I beleive there was an article in Times of India on this. Now the employee, whose basic is more than 6500 may contribute more than 541 into his Pension fund and draw a better pension at the end of his service.
You may check this out with your regional provident fund commissioner.
Dear Mr.Ghouse,
Thank you very much for enlightening me. It is good that you have sent this mail otherwise the person to whom I had sent the mail would have ended up getting the wrong information.
I am not based in India now. As I have handled these things when I was working there I am trying to help out people with statutory related queries. But I always make it a point to the individual to cross check with someother experienced person so that their doubts are fully clarified.appreciate your effort on the same. Keep in touch!!!
Thanks once again,
Regards,
Sadashiv Rao
From Kuwait, Kuwait
Thank you very much for enlightening me. It is good that you have sent this mail otherwise the person to whom I had sent the mail would have ended up getting the wrong information.
I am not based in India now. As I have handled these things when I was working there I am trying to help out people with statutory related queries. But I always make it a point to the individual to cross check with someother experienced person so that their doubts are fully clarified.appreciate your effort on the same. Keep in touch!!!
Thanks once again,
Regards,
Sadashiv Rao
From Kuwait, Kuwait
Dear Gunjane
Regarding your PF query
1. Presently under the EPF & MP act and scheme framed there under the act two rates of contributions are applicable i.e 10% and 12% . Rate of 10% contribution is applicable only on the establishment / industry specifically notified for this purpose under the schedule head. I do not know about your organisation. For minimum rate of contribution please check with the schedule under the EPF&MP Act,1952.
2. Act is applicable throughout india.However scheme is applicable where employment strength is of more than 19 employees. But an organisation can opt for voluntary coverage under the scheme. In this case all the employees are required to submit their consent in writing for deduction of EPF contribution from their monthly salary and employer also agrees in writing to pay employer's contribution along with the stautory administrative and insurance charges towards the fund. Employer has to provide some other information on Coverage Proforma to the Regional Provident Fund Commissioner for obtaining employer's code under the EPF & MP Act and Scheme. Regional PF commissioner if satisfied may issue employer code to establishment / organisation / factory for complying with the provisions of the act.
3. Putting cap on PF contribution means employee may opt for voluntary rate of contribution ( Higher than 12% rate) but employer is not bound to pay contribution on more than of Rs.6500.00 of Basic + DA.
I hope this meets your requirements.
regards
Anil Anand
From India, New Delhi
Regarding your PF query
1. Presently under the EPF & MP act and scheme framed there under the act two rates of contributions are applicable i.e 10% and 12% . Rate of 10% contribution is applicable only on the establishment / industry specifically notified for this purpose under the schedule head. I do not know about your organisation. For minimum rate of contribution please check with the schedule under the EPF&MP Act,1952.
2. Act is applicable throughout india.However scheme is applicable where employment strength is of more than 19 employees. But an organisation can opt for voluntary coverage under the scheme. In this case all the employees are required to submit their consent in writing for deduction of EPF contribution from their monthly salary and employer also agrees in writing to pay employer's contribution along with the stautory administrative and insurance charges towards the fund. Employer has to provide some other information on Coverage Proforma to the Regional Provident Fund Commissioner for obtaining employer's code under the EPF & MP Act and Scheme. Regional PF commissioner if satisfied may issue employer code to establishment / organisation / factory for complying with the provisions of the act.
3. Putting cap on PF contribution means employee may opt for voluntary rate of contribution ( Higher than 12% rate) but employer is not bound to pay contribution on more than of Rs.6500.00 of Basic + DA.
I hope this meets your requirements.
regards
Anil Anand
From India, New Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
PF Contribution on Leave Encashment - Clarification by EPFO.pdf