Dear Friends,
I use e return tool (version - 4) as provided by EPFO to calculate PF contribution.
There are a few employees whose Basic is more than Rs.6500 but we pay PF on entire basic amount. i.e. for a person with Basic Rs.10000.00, we pay PF on Rs.10000.00.
If i understand correctly, even for such employees while calculating EDLI contribution (A/C # 21), the employer has to contribute maximum on 6500.00 and not on 10000.00.
But the E-return software automatically calculates EDLI contribution on entire Basic amount and not on maximum 6500.00.
Can anyone please suggest if i am making any mistake in the software or is there any rule to be set in the software for this.
Thanks very much...
From India, Mumbai
1I use e return tool (version - 4) as provided by EPFO to calculate PF contribution.
There are a few employees whose Basic is more than Rs.6500 but we pay PF on entire basic amount. i.e. for a person with Basic Rs.10000.00, we pay PF on Rs.10000.00.
If i understand correctly, even for such employees while calculating EDLI contribution (A/C # 21), the employer has to contribute maximum on 6500.00 and not on 10000.00.
But the E-return software automatically calculates EDLI contribution on entire Basic amount and not on maximum 6500.00.
Can anyone please suggest if i am making any mistake in the software or is there any rule to be set in the software for this.
Thanks very much...
From India, Mumbai
Contrary to some of the views expressed in this forum, the basic rules on EPF & MP Act is very clear and implemented by the EPFO authorities.
These are:
1. Basic+DA upto Rs 6500: 12% of this will be recovered from Employee toward the EPF, 12% for the Basic+DA from the Employer towards the Pension Scheme and 1.61% from the Employer towards EDLI and Admin Charges.
2. Basic+DA over Rs 6500: 12% of the Basic+DA from the Employee towards the EPF. 12% of the Basic+DA from the Employers of which Rs 542 (8.33% of 6500, which is the Maximum) will be deposited towards the Pension Schme and the rest towards the EPF. The EDLI+Admin Charges are as before.
Therefore, if the Basic is Rs 10,000 then the EPF Software will:
(a) 12% of Rs 10,000 = Rs 1200 from the Employee towards the EPF.
(b) 12% of Rs 10,000 = Rs 1200 from the Employer which will Rs 542 will be towards the Pension Scheme and the rest (Rs 658) will be deposited to the EPF.
(c) 1.61% (Rs 161) will be towards the EDLI and Admin charges.
In a press briefing some time back, the EPFO Commissioner also reiterated the above and added that some of the industries - notably in Tamil Nadu, Maharashtra etc - are defaulting in this due ignorance! It is seen that almost every week there is a advertisement in the newspapers from the EPFO organisation about recovery of dues from a employer! And the recovery sum totals to above Rs 1 Crore!
Rajusiachen.
From India, Coimbatore
These are:
1. Basic+DA upto Rs 6500: 12% of this will be recovered from Employee toward the EPF, 12% for the Basic+DA from the Employer towards the Pension Scheme and 1.61% from the Employer towards EDLI and Admin Charges.
2. Basic+DA over Rs 6500: 12% of the Basic+DA from the Employee towards the EPF. 12% of the Basic+DA from the Employers of which Rs 542 (8.33% of 6500, which is the Maximum) will be deposited towards the Pension Schme and the rest towards the EPF. The EDLI+Admin Charges are as before.
Therefore, if the Basic is Rs 10,000 then the EPF Software will:
(a) 12% of Rs 10,000 = Rs 1200 from the Employee towards the EPF.
(b) 12% of Rs 10,000 = Rs 1200 from the Employer which will Rs 542 will be towards the Pension Scheme and the rest (Rs 658) will be deposited to the EPF.
(c) 1.61% (Rs 161) will be towards the EDLI and Admin charges.
In a press briefing some time back, the EPFO Commissioner also reiterated the above and added that some of the industries - notably in Tamil Nadu, Maharashtra etc - are defaulting in this due ignorance! It is seen that almost every week there is a advertisement in the newspapers from the EPFO organisation about recovery of dues from a employer! And the recovery sum totals to above Rs 1 Crore!
Rajusiachen.
From India, Coimbatore
Legally Admin and EDLI shall be paid on Total Basic plus DA on which an organisation pays PF contribution.
If you are restricting it to Rs 6500/ then the EDLI and Admin will be on Rs 6500/ If you are paying on the entire Basic plus Da, then charges will be levied on the entire amount
The payment you ae making is in order
T Sivasankaran
From India, Chennai
If you are restricting it to Rs 6500/ then the EDLI and Admin will be on Rs 6500/ If you are paying on the entire Basic plus Da, then charges will be levied on the entire amount
The payment you ae making is in order
T Sivasankaran
From India, Chennai
Dear erichurricane,
The problem which you have mentioned regarding e-return tool was indeed present, but till last month only.
From this month onwards, in the e-return tool, the EDLI contribution is automatically being calculated on maximum Rs.6500.00, even for employees with basic higher than Rs.6500.00
I have generated challans for some of my clients yesterday and i can confirm this.
From India, Mumbai
The problem which you have mentioned regarding e-return tool was indeed present, but till last month only.
From this month onwards, in the e-return tool, the EDLI contribution is automatically being calculated on maximum Rs.6500.00, even for employees with basic higher than Rs.6500.00
I have generated challans for some of my clients yesterday and i can confirm this.
From India, Mumbai
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