Dear all, I have read various mails on this group regarding PF contribution where basic exceeds Rs.6500/- I have a little different query. Company has been paying PF contribution even where basic exceeded 6500/- but now wants to restrict only upto basic of 6500/- ie we want to deduct PF for employees whose basic exceeds 6500/- but want to contribute only on 6500 and not the entire basic.
Another query is - can Company completely stop contributing where basic exceeded 6500? These kinds of requests have been received from employees since they don't want too much deduction to happen on account of PF. What is the procedure involved for restricting PF contribution upto 6500/- and what are the implications? does act permit it and if yes how do we go about doing it.
Regards,
Vandana
From India, Mumbai
1Another query is - can Company completely stop contributing where basic exceeded 6500? These kinds of requests have been received from employees since they don't want too much deduction to happen on account of PF. What is the procedure involved for restricting PF contribution upto 6500/- and what are the implications? does act permit it and if yes how do we go about doing it.
Regards,
Vandana
From India, Mumbai
Hi Vandana
Regarding PF Contribution -Employer should pay 12% of Basic salary, in which 8.33% will goes to Pension Scheme balance 3.67 will goes to PF.
While calculating the Pension Scheme employer should pay 8.33% of basic (limit is upto Rs.6500/ ie Rs.541/-) not more than that rest will goes to PF.
say for eg. if the employees is getting Basic salary of Rs.8000/- Rs.541/-(8.33%) will goes to pension scheme and Rs.419/- will goes to PF, however employer has to contribute 12% of basic, whatever be the amount.
Regarding Employee Contirbution of 12% from basic is unavoidable as per the PF act.
Please go thru ppt. for more details.
Regards
Karthik
From India, Madras
Regarding PF Contribution -Employer should pay 12% of Basic salary, in which 8.33% will goes to Pension Scheme balance 3.67 will goes to PF.
While calculating the Pension Scheme employer should pay 8.33% of basic (limit is upto Rs.6500/ ie Rs.541/-) not more than that rest will goes to PF.
say for eg. if the employees is getting Basic salary of Rs.8000/- Rs.541/-(8.33%) will goes to pension scheme and Rs.419/- will goes to PF, however employer has to contribute 12% of basic, whatever be the amount.
Regarding Employee Contirbution of 12% from basic is unavoidable as per the PF act.
Please go thru ppt. for more details.
Regards
Karthik
From India, Madras
Dear Vandana
Under the EPF & MP act,1952 to become eligible for membership , it is defined that salary of person should not exceed Rs.6500.00 per month. But this is applicable when a person is joining the EPF scheme for the first time in career. If your company has enrolled all the employees irrespective of their salary then this is known as volutary enrolment towards the EPF scheme.
As you apprised EPF Contributions has also been deducted on full salary and same amount has been contributed by the employer towards EPF. Contributions beyond statutory limit of Rs.6500.00 are known as voluntary contributions.This is also allowed under the scheme.
But this voluntary contributions beyond salary of Rs.6500.00 needs to be intimated to concerned Regional Provident Fund Commissioner office.
Now ,If, you have already intimated the concerned authority in this regard then for restricting the contributions ( Employee & Employer) to salary of Rs.6500.00 which is also allowed , please send revised intimation in this regard for withdrawal of voluntary contributions.
As far as dicontinuation of deductions is not permissible under the act. Once a member of scheme either normally or through voluntary means, will remain member of the scheme irrespective of salary. The contributions can be restricted upto salary of Rs.6500.00 per month( Limit which is currently applicable).
I hope this is clear that contributions can be restricted upto a salary of Rs.6500.00 but under no circumstances can be discontinued while the member is still in service.
Regards
Anil Anand
From India, New Delhi
Under the EPF & MP act,1952 to become eligible for membership , it is defined that salary of person should not exceed Rs.6500.00 per month. But this is applicable when a person is joining the EPF scheme for the first time in career. If your company has enrolled all the employees irrespective of their salary then this is known as volutary enrolment towards the EPF scheme.
As you apprised EPF Contributions has also been deducted on full salary and same amount has been contributed by the employer towards EPF. Contributions beyond statutory limit of Rs.6500.00 are known as voluntary contributions.This is also allowed under the scheme.
But this voluntary contributions beyond salary of Rs.6500.00 needs to be intimated to concerned Regional Provident Fund Commissioner office.
Now ,If, you have already intimated the concerned authority in this regard then for restricting the contributions ( Employee & Employer) to salary of Rs.6500.00 which is also allowed , please send revised intimation in this regard for withdrawal of voluntary contributions.
As far as dicontinuation of deductions is not permissible under the act. Once a member of scheme either normally or through voluntary means, will remain member of the scheme irrespective of salary. The contributions can be restricted upto salary of Rs.6500.00 per month( Limit which is currently applicable).
I hope this is clear that contributions can be restricted upto a salary of Rs.6500.00 but under no circumstances can be discontinued while the member is still in service.
Regards
Anil Anand
From India, New Delhi
DEAR KARTIK,
ITS AN AMAZIN PPT,I REALLY LIKED & IT HELPED ME A LOT.M A FRESHER RECENTLY JOINED AN ORGANISATION IN HR,IVE TO HANDLE PF,GRATUITY,INSURANCE SO THIS PPT WAS VERY HELPFUL TO ME.
SIR,IF U DNT MIND CAN I ASK QUESTION WHICH I'VE NOT UNDERSTOOD IN D PPT.PLS MAIL ME URE EMAIL ID.
THANKX A LOT
SHILPA
:lol:
ITS AN AMAZIN PPT,I REALLY LIKED & IT HELPED ME A LOT.M A FRESHER RECENTLY JOINED AN ORGANISATION IN HR,IVE TO HANDLE PF,GRATUITY,INSURANCE SO THIS PPT WAS VERY HELPFUL TO ME.
SIR,IF U DNT MIND CAN I ASK QUESTION WHICH I'VE NOT UNDERSTOOD IN D PPT.PLS MAIL ME URE EMAIL ID.
THANKX A LOT
SHILPA
:lol:
Dear Vandana,
You have raised a good question here. The only problem with PF is you can't roll back once employee is enrolled in the scheme. It would be legal complications. In this case it is better if you can take advice from PF consultant or authority.
Regards,
John
From India, Delhi
You have raised a good question here. The only problem with PF is you can't roll back once employee is enrolled in the scheme. It would be legal complications. In this case it is better if you can take advice from PF consultant or authority.
Regards,
John
From India, Delhi
I have a question. If the PF is deducted for 10 years then, are the employees working with private companies also eligible get pension benefit? I heard that it was thr for govt employees only and that too is now not being given to freshly hired govt employees.
Please throw some light on this.
From India, Delhi
Please throw some light on this.
From India, Delhi
Hello Gentlemen,
How to register the E.S.I & P.F? and how to provide the E.S.I & P.F to the employees,
what the is minimum and maxim employees? rates and all.
kindly let me the detailed information about E.S.I & P.F
thanking you,
[IMG]https://www.citehr.com/misc.php?do=email_dev&email=dmVua2F0cmFvcGFtYXJ0aG lAZ21haWwuY29t[/IMG]
From India, Hyderabad
How to register the E.S.I & P.F? and how to provide the E.S.I & P.F to the employees,
what the is minimum and maxim employees? rates and all.
kindly let me the detailed information about E.S.I & P.F
thanking you,
[IMG]https://www.citehr.com/misc.php?do=email_dev&email=dmVua2F0cmFvcGFtYXJ0aG lAZ21haWwuY29t[/IMG]
From India, Hyderabad
Dear Vandana,
If your organization has been paying contribution on the full basic salary then it has to continue with that. Once a statutory benefit offered to an employee, cannot be reduced during the continuation of his/her service. It will have serious legal implications.
However, for new joinees you may choose to contribute on ly upto baisc of Rs 6500. Also, any contribution made over and above Rs 6500 is NOT a Voluntary PF if the similar amount has been contributed by the employer as well.
Any organization once covered under purview of EPF act, MUST equally contribute towards the PF of an employees.
VPF is Voluntary PF which an employee opts for, wherein employer do not contribute towards it.
Hope this would clarify..Probably my response would confuse you as to which response is correct..You may check with some other senior guys as well for your satisfaction. However, just FYI..I lead the HR ops team for my organization and has more than 8 yrs of exp.
Regards
Mukul Mathur
From India, Mumbai
If your organization has been paying contribution on the full basic salary then it has to continue with that. Once a statutory benefit offered to an employee, cannot be reduced during the continuation of his/her service. It will have serious legal implications.
However, for new joinees you may choose to contribute on ly upto baisc of Rs 6500. Also, any contribution made over and above Rs 6500 is NOT a Voluntary PF if the similar amount has been contributed by the employer as well.
Any organization once covered under purview of EPF act, MUST equally contribute towards the PF of an employees.
VPF is Voluntary PF which an employee opts for, wherein employer do not contribute towards it.
Hope this would clarify..Probably my response would confuse you as to which response is correct..You may check with some other senior guys as well for your satisfaction. However, just FYI..I lead the HR ops team for my organization and has more than 8 yrs of exp.
Regards
Mukul Mathur
From India, Mumbai
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