@Santanu,
The P.F. deduction is @12% of Basic+D.A. Normally the gross monthly salary constitutes of Basic+D.A.+HRA+Allowances. In your case, your gross monthly salary is Rs.34000/- Hence, you need to check what is your Basic salary out of that. I am sure, it will be Rs.6500/- Hence, the PF is deducted only on this Basic amount. Irony is, in the earlier days, the Basic component was kept low so that the Employer contribution towards PF, ESIC, Gratuity, etc. was low. Now, its the other way round. It is kept above Rs.15000/- to get away with the ESIC & PF regulations.
@ Jayashree,
Your clarification is ambiguous. For last many years, my Basic salary has been much more than Rs.20000/- and all my past employers have deducted on that amount at the appropriate rate (earlier 8.33 & now 12%). Hence, I do not think it may be voluntary on the organisation to contribute the applicable rate only on Rs.6500/- irrespective of the Basic+ DA. Please clarify.
Regards:
From India, Mumbai
The P.F. deduction is @12% of Basic+D.A. Normally the gross monthly salary constitutes of Basic+D.A.+HRA+Allowances. In your case, your gross monthly salary is Rs.34000/- Hence, you need to check what is your Basic salary out of that. I am sure, it will be Rs.6500/- Hence, the PF is deducted only on this Basic amount. Irony is, in the earlier days, the Basic component was kept low so that the Employer contribution towards PF, ESIC, Gratuity, etc. was low. Now, its the other way round. It is kept above Rs.15000/- to get away with the ESIC & PF regulations.
@ Jayashree,
Your clarification is ambiguous. For last many years, my Basic salary has been much more than Rs.20000/- and all my past employers have deducted on that amount at the appropriate rate (earlier 8.33 & now 12%). Hence, I do not think it may be voluntary on the organisation to contribute the applicable rate only on Rs.6500/- irrespective of the Basic+ DA. Please clarify.
Regards:
From India, Mumbai
The Employees Provident Fund & Miscellaneous provisions Act 1952 covers employees drawing a salary of Rs6500/pm(wef1-06-2001)The rate of contribution is 12percentof the basic,DA,and retaining allowance if any.The rate of contribution is however10 percent in the case of covered establishments employing less than 20 persons,sick industrial company as defined under sec3 of the industrial companies, ay establishment which has accumulated losses equal to or exceeding its entire networth at the end of financial yearand jute,beedi, brick,coir and guar gum industries.therfore whatever deductions are made from your salary towards PF,It is in accordance with the provisions of law and the employer is obliged to contribute the same amount. If you want to contribute anything overand above it is purely optional.
From India, Hyderabad
1From India, Hyderabad
Dear Santanu,
As per the PF Act is Rs.6500/- is the ceiling for calculation of PF contribution. Hence the your PF deduction is Rs.780/= i.e., 12% of 6500/-. However you can choose to make a voluntary PF contribution of 12% of Rs.34,000/ minus Rs.780/- ie., Rs.4080-780= Rs.3300. This will help you in your permissible savings for IT.
The company will contribute only Rs.780/-(Rs.239/- towards PF and Rs.541/- towards EPS), as they have chosen to stick to the mandatory limits.
Hope you understand.
Regards,
Kosal Raj.
From India, Madras
As per the PF Act is Rs.6500/- is the ceiling for calculation of PF contribution. Hence the your PF deduction is Rs.780/= i.e., 12% of 6500/-. However you can choose to make a voluntary PF contribution of 12% of Rs.34,000/ minus Rs.780/- ie., Rs.4080-780= Rs.3300. This will help you in your permissible savings for IT.
The company will contribute only Rs.780/-(Rs.239/- towards PF and Rs.541/- towards EPS), as they have chosen to stick to the mandatory limits.
Hope you understand.
Regards,
Kosal Raj.
From India, Madras
i think lot of suggestion are being posted for any question ,but still a doubt remain for the correct answer.
can there be any legal expert on cite hr who will provide us the correct answer to that citing the relevant LAWS or the case citation in this regard.Following Practise in one company or the others does not show the picture of Statue .
so many suggestions make us confused .i think Mr. Khosla and some other senior legal experts can take this initiative to come forward and suggest any way out and make us feel that we are following the Statute .
can there be any legal expert on cite hr who will provide us the correct answer to that citing the relevant LAWS or the case citation in this regard.Following Practise in one company or the others does not show the picture of Statue .
so many suggestions make us confused .i think Mr. Khosla and some other senior legal experts can take this initiative to come forward and suggest any way out and make us feel that we are following the Statute .
As per the Employees Provident Funds & Miscellaneous Provisions Act, 1952 employees whose salary is less than or equal to Rs. 6,500/- are covered by the act. Hence the deduction towards PF contribution is restricted to 12% of the maximum salary limit i.e. 6,500/- pm.
Regards
V. Ekkirala
IMT-Nagpur
From India, Mumbai
Regards
V. Ekkirala
IMT-Nagpur
From India, Mumbai
My question is If assume that last 3 to 4 years, company is calculate PF on basic i.e Rs.34000/- and in between they start deducting PF on ceilling i.e Rs.6500/- in that case what the company suppose to do and what employee suppose to do. pls send your valuable advise.
From India, Mumbai
From India, Mumbai
Dear Avdhoot,
Nothing to do. At one stage employer was in a position to contribute at higher salary. Accordingly he contributed. Now the situation changed. There may be queries from the auditors or the financial position become down. Or even because of his adament stand that henceforth no higher contribution is to be paid for a salary beyond Rs. 6,500. Whatever be the ground, there is no claim for the employees for over and above the ceiling limit.
Abbas.P.S
From India, Bangalore
Nothing to do. At one stage employer was in a position to contribute at higher salary. Accordingly he contributed. Now the situation changed. There may be queries from the auditors or the financial position become down. Or even because of his adament stand that henceforth no higher contribution is to be paid for a salary beyond Rs. 6,500. Whatever be the ground, there is no claim for the employees for over and above the ceiling limit.
Abbas.P.S
From India, Bangalore
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