The Provident Fund (PF) deduction rule in India states that for employees with a basic salary and dearness allowance (DA) exceeding Rs. 15,000, the PF contribution is calculated only on the statutory limit, which is Rs. 15,000. Here's how to determine the PF basic in such cases:
- For an employee with a basic salary + DA below or equal to Rs. 15,000, the PF contribution is calculated on the actual basic salary.
- For an employee with a basic salary + DA exceeding Rs. 15,000, the PF contribution is calculated on Rs. 15,000.
Calculation Example:
If an old employee's basic salary + DA is Rs. 20,000:
- The PF basic considered for deduction will be Rs. 15,000.
- The PF contribution will be calculated based on this Rs. 15,000 amount.
It's essential for employers to adhere to these PF deduction rules to ensure compliance with labor laws in India.
From India, Gurugram
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29- For an employee with a basic salary + DA below or equal to Rs. 15,000, the PF contribution is calculated on the actual basic salary.
- For an employee with a basic salary + DA exceeding Rs. 15,000, the PF contribution is calculated on Rs. 15,000.
Calculation Example:
If an old employee's basic salary + DA is Rs. 20,000:
- The PF basic considered for deduction will be Rs. 15,000.
- The PF contribution will be calculated based on this Rs. 15,000 amount.
It's essential for employers to adhere to these PF deduction rules to ensure compliance with labor laws in India.
From India, Gurugram
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