Hello Friends,
I am with a Pvt Ltd company. I would like to know if there is any provision in the PF, ESIT, PT laws where the company does not deduct from the employee's salary but pays them separately. Is it possible for a company to do this?
Please reply immediately as it is urgent.
Thank you.
From India, Mumbai
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I am with a Pvt Ltd company. I would like to know if there is any provision in the PF, ESIT, PT laws where the company does not deduct from the employee's salary but pays them separately. Is it possible for a company to do this?
Please reply immediately as it is urgent.
Thank you.
From India, Mumbai
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Hi Rohit,
As per the salary slab, the company is bound to be compliant with all the statutory requirements. To avoid ESI deduction, the company has to fix a minimum gross salary of Rs. 10,000 per month. You can avoid PF deductions if the employee's basic is more than Rs. 6,000. However, you cannot avoid Professional Tax.
Regards,
Jyoti
From India, Mumbai
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As per the salary slab, the company is bound to be compliant with all the statutory requirements. To avoid ESI deduction, the company has to fix a minimum gross salary of Rs. 10,000 per month. You can avoid PF deductions if the employee's basic is more than Rs. 6,000. However, you cannot avoid Professional Tax.
Regards,
Jyoti
From India, Mumbai
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Hi Joyti,
I understand your point, but could you please help me find more options or references in legal books? I am currently facing a minor crisis and need to avoid issues related to PF, ESIC, and PT.
I am willing to continue with PT, but dealing with PF and ESIC is proving to be a significant challenge for me. I would appreciate it if you could assist me in finding a solution.
Regards,
Rohit
From India, Mumbai
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I understand your point, but could you please help me find more options or references in legal books? I am currently facing a minor crisis and need to avoid issues related to PF, ESIC, and PT.
I am willing to continue with PT, but dealing with PF and ESIC is proving to be a significant challenge for me. I would appreciate it if you could assist me in finding a solution.
Regards,
Rohit
From India, Mumbai
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Hi Jyoti,
I understand your point, but kindly see if there are any other options or references in legal books as I am currently facing a slight crisis and need to avoid issues with PF, ESIC, and PT. I can manage with PT, but PF and ESIC are posing significant problems for me. Please try to find a solution.
Regards,
Rohit
Rohit D. Bhanushali
RDCM- The Cargo Company.
From India, Mumbai
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I understand your point, but kindly see if there are any other options or references in legal books as I am currently facing a slight crisis and need to avoid issues with PF, ESIC, and PT. I can manage with PT, but PF and ESIC are posing significant problems for me. Please try to find a solution.
Regards,
Rohit
Rohit D. Bhanushali
RDCM- The Cargo Company.
From India, Mumbai
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Hi, Rohit,
You can do one thing to increase your gross by 10100/-, which would avoid the ESI deduction, and your basic should be more than 6500/-. In that case, you need not pay the PF as well. However, PT is something that cannot be avoided.
The above scenario would entirely depend on the employee's salary. If the gross is less than 10100/- and the basic is less than 6500/-, then you cannot avoid these deductions.
Chitra
From India, Mumbai
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24You can do one thing to increase your gross by 10100/-, which would avoid the ESI deduction, and your basic should be more than 6500/-. In that case, you need not pay the PF as well. However, PT is something that cannot be avoided.
The above scenario would entirely depend on the employee's salary. If the gross is less than 10100/- and the basic is less than 6500/-, then you cannot avoid these deductions.
Chitra
From India, Mumbai
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Hi Rohit,
PF also cannot be avoided if the deduction is currently being made in the current company. Even if your basic goes beyond Rs. 6500, PF deduction cannot be stopped. Once the deduction has started, you cannot stop it.
Dear Friends, please correct me if I am wrong.
Regards,
Manoj
From India, Bangalore
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PF also cannot be avoided if the deduction is currently being made in the current company. Even if your basic goes beyond Rs. 6500, PF deduction cannot be stopped. Once the deduction has started, you cannot stop it.
Dear Friends, please correct me if I am wrong.
Regards,
Manoj
From India, Bangalore
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Hi Manoj,
Until I know, once the employee's basic is more than Rs 6500, it becomes optional whether the employee wants the deduction or not. But when it is taken as a component and everyone's PF is deducted despite the basic being more than Rs 6500, then yes, it's continuous.
Let me know if I am wrong anywhere.
Thanks,
Chitra
From India, Mumbai
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Until I know, once the employee's basic is more than Rs 6500, it becomes optional whether the employee wants the deduction or not. But when it is taken as a component and everyone's PF is deducted despite the basic being more than Rs 6500, then yes, it's continuous.
Let me know if I am wrong anywhere.
Thanks,
Chitra
From India, Mumbai
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Hi Rohit,
One thing you can do is increase your total salary (gross salary) by more than 10000/- so that you will not have ESI deducted. The maximum salary ceiling for PF is 6500/-. If an employee's salary is more than 10000/-, you cannot deduct ESI and PF, but PT is deducted.
Best regards,
Beeyardas
From India, Kochi
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One thing you can do is increase your total salary (gross salary) by more than 10000/- so that you will not have ESI deducted. The maximum salary ceiling for PF is 6500/-. If an employee's salary is more than 10000/-, you cannot deduct ESI and PF, but PT is deducted.
Best regards,
Beeyardas
From India, Kochi
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Hi folks,
Most of the information given so far seems to be in line with the PF regulations. Thanks, folks, for such input. However, the PF contribution made by some firms is based on the gross salary, and some contribute on the sum of Basic and DA. There seems to be a case pending with the Supreme Court for its verdict. Could anyone shed some light on this matter, please?
With regards,
Franklyne
From India, Coimbatore
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Most of the information given so far seems to be in line with the PF regulations. Thanks, folks, for such input. However, the PF contribution made by some firms is based on the gross salary, and some contribute on the sum of Basic and DA. There seems to be a case pending with the Supreme Court for its verdict. Could anyone shed some light on this matter, please?
With regards,
Franklyne
From India, Coimbatore
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Dear Franklyne, under section 29 of the act PF contribution shall be calculated on the basis of Basic wages,dearness allowancce and retaining allowance if any. regards RNS
From India, Mumbai
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From India, Mumbai
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Hi Rohit,
EPF can be deducted on Basic salary + DA + Food Allowance + any other special allowance which is not defined, i.e., up to Rs. 6500. ESIC deduction will be on Rs. 10,000 gross salary, and professional tax can't be avoided.
From,
Sumit
From India, Ghaziabad
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EPF can be deducted on Basic salary + DA + Food Allowance + any other special allowance which is not defined, i.e., up to Rs. 6500. ESIC deduction will be on Rs. 10,000 gross salary, and professional tax can't be avoided.
From,
Sumit
From India, Ghaziabad
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Hi Rohit, PF and ESI deductions are compulsory depending on the employee count and sector of the organization. If the number of employees is less than 20, then the deduction is not compulsory.
Dear friends, correct me if I am wrong.
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Dear friends, correct me if I am wrong.
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Hi Friends,
I think Dakshan is right. By the way, Dakshan, visit these two websites for more information:
1) [EPFO](http://www.epfindia.com)
2) [ESIC](http://www.esic.nic.in)
Regards,
Amith R.
From India, Bangalore
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I think Dakshan is right. By the way, Dakshan, visit these two websites for more information:
1) [EPFO](http://www.epfindia.com)
2) [ESIC](http://www.esic.nic.in)
Regards,
Amith R.
From India, Bangalore
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I am with a Pvt Ltd company. I want to know if there is any space available in any or all of the PF, ESIT, PT laws that the company doesn't deduct from employees and pays them into their salary. Can a company do this?
Please reply immediately, it's urgent.
Email: kalpesh_144anand@yahoo.co.in
Email: kalpesh_anand144@rediffmail.com
From India, Mumbai
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Please reply immediately, it's urgent.
Email: kalpesh_144anand@yahoo.co.in
Email: kalpesh_anand144@rediffmail.com
From India, Mumbai
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I am with a Pvt Ltd company. I want to know if there is any space available in any or all of them PF, ESIT, PT, DA, also other salary administration in law that the company doesn't deduct from employees and pays them into their salary. Can a company do this?
Please reply immediately, it's urgent.
Email: kalpesh_144anand@yahoo.co.in
Email: kalpesh_anand144@rediffmail.com
From India, Mumbai
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Please reply immediately, it's urgent.
Email: kalpesh_144anand@yahoo.co.in
Email: kalpesh_anand144@rediffmail.com
From India, Mumbai
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I am with a Pvt Ltd company. I want to know if there is any space available in any or all of them for PF, ESI, PT, DA, as well as other salary administration in law. A company that doesn't deduct from employees and pays them into their salary. Can a company do this?
Please reply immediately, as it is urgent.
Email: kalpesh_144anand@yahoo.co.in
Email: kalpesh_anand144@rediffmail.com
From India, Mumbai
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Please reply immediately, as it is urgent.
Email: kalpesh_144anand@yahoo.co.in
Email: kalpesh_anand144@rediffmail.com
From India, Mumbai
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Hi Kalpesh,
I too wanted the same kind of way, and I think I have found one. Someone consulted me that if an employee is ready and if they are giving in writing to the company, then PF can be paid directly into their salary. Kindly correct me!
From India, Mumbai
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I too wanted the same kind of way, and I think I have found one. Someone consulted me that if an employee is ready and if they are giving in writing to the company, then PF can be paid directly into their salary. Kindly correct me!
From India, Mumbai
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I think the thread was initially posted to get advice on how an employer could get out of EPF and ESI coverage. Am I right?
Simply increasing the wages/salary of employees beyond 10,000 or 6,500, as suggested by some of the members, will not serve the purpose. This is because, first of all, the basic factor determining the coverage of ESI/EPF is the number of employees. An organization employing not fewer than 20 will be covered under the EPF, and a factory employing 10 (other establishments employing 20) is covered by ESI. Then, who is covered and whose contributions are to be deducted and contributed will be decided by the salary paid. Certainly, an employee drawing more than Rs 6,500 AT THE TIME OF JOINING/or at the time of enforcement of EPF will not be covered under the EPF, and one drawing more than Rs 10,000 will not be covered by ESI. But the establishment will be covered for those who are drawing less than the specified limit irrespective of the number of employees. Let there be one person whose salary is Rs 6,500; contribution and returns in respect of him shall be submitted. Similarly, let there be one employee whose salary is less than 10,000, ESI in respect of him shall only be submitted.
Now, in order to avoid ESI/EPF, if you raise the salary, you will be at risk. At any time, the government may announce an upward shift in salary. There have been revisions from time to time, for example, from 2,500 to 3,500, from 3,500 to 6,500 and 7,500, and now the salary limit has been fixed at 10,000, and we cannot say that the limit will remain at 10,000/6,500.
Hence, it is advisable to be covered. Moreover, once ESI is covered, many compensations that would otherwise be payable by the employer would be shifted to the ESI Corporation.
Regards,
Madhu.T.K
From India, Kannur
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Simply increasing the wages/salary of employees beyond 10,000 or 6,500, as suggested by some of the members, will not serve the purpose. This is because, first of all, the basic factor determining the coverage of ESI/EPF is the number of employees. An organization employing not fewer than 20 will be covered under the EPF, and a factory employing 10 (other establishments employing 20) is covered by ESI. Then, who is covered and whose contributions are to be deducted and contributed will be decided by the salary paid. Certainly, an employee drawing more than Rs 6,500 AT THE TIME OF JOINING/or at the time of enforcement of EPF will not be covered under the EPF, and one drawing more than Rs 10,000 will not be covered by ESI. But the establishment will be covered for those who are drawing less than the specified limit irrespective of the number of employees. Let there be one person whose salary is Rs 6,500; contribution and returns in respect of him shall be submitted. Similarly, let there be one employee whose salary is less than 10,000, ESI in respect of him shall only be submitted.
Now, in order to avoid ESI/EPF, if you raise the salary, you will be at risk. At any time, the government may announce an upward shift in salary. There have been revisions from time to time, for example, from 2,500 to 3,500, from 3,500 to 6,500 and 7,500, and now the salary limit has been fixed at 10,000, and we cannot say that the limit will remain at 10,000/6,500.
Hence, it is advisable to be covered. Moreover, once ESI is covered, many compensations that would otherwise be payable by the employer would be shifted to the ESI Corporation.
Regards,
Madhu.T.K
From India, Kannur
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Hi,
The best thing is to engage a consultant to handle your ESI and PF affairs. Both of these are tricky areas, and no matter what you do, you are likely to make mistakes. Consultants charge reasonable fees based on headcount and take care of all your returns, appropriate policy implementation assistance, and corrective action at ESI and PF offices for some additional cost.
From India, Pune
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The best thing is to engage a consultant to handle your ESI and PF affairs. Both of these are tricky areas, and no matter what you do, you are likely to make mistakes. Consultants charge reasonable fees based on headcount and take care of all your returns, appropriate policy implementation assistance, and corrective action at ESI and PF offices for some additional cost.
From India, Pune
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Hi,
The best thing to do is to engage a consultant to handle your ESI and PF affairs. Both of these are tricky areas, and no matter what you do, you are likely to make errors somewhere. Consultants charge reasonable fees based on headcount and take care of all your returns, provide help with appropriate policy implementation, and offer corrective action at ESi and PF offices for some separate extra cost.
Please let me know if you need any further assistance or information.
Thank you.
From India, Pune
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The best thing to do is to engage a consultant to handle your ESI and PF affairs. Both of these are tricky areas, and no matter what you do, you are likely to make errors somewhere. Consultants charge reasonable fees based on headcount and take care of all your returns, provide help with appropriate policy implementation, and offer corrective action at ESi and PF offices for some separate extra cost.
Please let me know if you need any further assistance or information.
Thank you.
From India, Pune
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We, the members of citehr, provide professional advice, and it is our moral responsibility to assist those who need the service of HR professionals for FREE. Even if you approach an HR consultant, the advice they could give will be the same as what we offer. Regarding ESI and EPF, these are not complicated matters as one of the members has mentioned. Don't get upset.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Hi Madhu,
Thanks for your words and also for the explanation. You have made the point clear, and hopefully, all will now have some idea about the same.
Friends, if you ask me, everything is simple basics that we tend to get confused about sometimes. Moreover, anyone starting the organization new or having a small setup will always have problems, and once everything is settled, you will not have any problem. So, I would also suggest you contact the departments directly, which will help you get the solution sometimes.
Anyways, all the best, Rohit. Hope all are fine now.
Regards,
Amith R.
From India, Bangalore
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Thanks for your words and also for the explanation. You have made the point clear, and hopefully, all will now have some idea about the same.
Friends, if you ask me, everything is simple basics that we tend to get confused about sometimes. Moreover, anyone starting the organization new or having a small setup will always have problems, and once everything is settled, you will not have any problem. So, I would also suggest you contact the departments directly, which will help you get the solution sometimes.
Anyways, all the best, Rohit. Hope all are fine now.
Regards,
Amith R.
From India, Bangalore
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As per what I've read so far, PF is applicable on the Basic. You need to make sure that the basic is more than 6500. Any basic less than or equal to 6500 comes under the PF act. Firms which pay a gross of 6500 or more, just keep that an amount of 6500 or more under the Basic category and the rest in other categories to avoid PF.
PF is applicable to any establishment which is a factory or an industry specified in Schedule 1, employing more than 20 persons. Any firm employing less than 20 persons can also be covered voluntarily u/s 1(4) of the act (P.B.S. Kumar, A checklist of Labour Laws).
Regards, PJ
From India, Mumbai
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PF is applicable to any establishment which is a factory or an industry specified in Schedule 1, employing more than 20 persons. Any firm employing less than 20 persons can also be covered voluntarily u/s 1(4) of the act (P.B.S. Kumar, A checklist of Labour Laws).
Regards, PJ
From India, Mumbai
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Let there be one person whose salary is Rs 6500; contribution and returns in respect of him shall be submitted. Similarly, let there be one employee whose salary is less than Rs 10,000; ESI in respect of him shall only be submitted.
Hi Madhu,
While what you mentioned is correct, in the case of ESI, if the total number of employees below 10K Gross is more than 10, it is mandatory to have ESI for all the 10 employees. For instance, if the total employee strength is 70 and the number of employees below 10K gross is 7, then the company can opt out of ESIC. However, if the total number of employees drawing a gross salary of less than 10K exceeds 10, then the company must have ESIC.
Correct me if I am wrong.
Regards,
Devang Naik
From India, Mumbai
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Hi Madhu,
While what you mentioned is correct, in the case of ESI, if the total number of employees below 10K Gross is more than 10, it is mandatory to have ESI for all the 10 employees. For instance, if the total employee strength is 70 and the number of employees below 10K gross is 7, then the company can opt out of ESIC. However, if the total number of employees drawing a gross salary of less than 10K exceeds 10, then the company must have ESIC.
Correct me if I am wrong.
Regards,
Devang Naik
From India, Mumbai
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Dear,
For the PF exemption, the Basic salary should be more than 6500/-. For the ESI exemption, the Gross salary should be more than 10000/-. For the P.Tax exemption up to 5000/- Gross salary, there is no P.Tax in (A.P) above as per the slab. You can check in your state. Further, as per the P.F Act, the contribution should be based on the Gross salary & above 6500/-. Basic salary is exempted or as per the wish of the employee. However, some companies are paying PF as Basic + D.A., provided the PF department does not raise any objections.
Take care! Rameshwar
Take Care, Rameshwar
From India, Visakhapatnam
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For the PF exemption, the Basic salary should be more than 6500/-. For the ESI exemption, the Gross salary should be more than 10000/-. For the P.Tax exemption up to 5000/- Gross salary, there is no P.Tax in (A.P) above as per the slab. You can check in your state. Further, as per the P.F Act, the contribution should be based on the Gross salary & above 6500/-. Basic salary is exempted or as per the wish of the employee. However, some companies are paying PF as Basic + D.A., provided the PF department does not raise any objections.
Take care! Rameshwar
Take Care, Rameshwar
From India, Visakhapatnam
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Dear Members The Latest Clarification given By EPFC on Leave Encashment is attached for reference.
From India, Madras
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From India, Madras
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Dear All, The EPFC sent a Circular on the above subject. The Clarification attached for reference. Regards, Murugavelu.B Chennai
From India, Madras
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From India, Madras
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Dear Devang Naik, In the case of ESI, your interpretation may be right. I shall get back to you with the details. Regards, Madhu.T.K
From India, Kannur
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From India, Kannur
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hello can any one give me information about pf form no which form is used when as i am new in this profession regard, praveen thakur
From India, Chandigarh
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From India, Chandigarh
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Dear VenkaitPF shall not be deducted on gross salary, as per the act it should be deducted on Basic+DA only.Pramod Kumar Tripathi
From India, Faridabad
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From India, Faridabad
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Dear Praveen Thakur,
The following are the forms used for PF purposes:
1. Form-2: Nomination Form/Declaration form to be filled when a new employee joins.
2. Form-5: To be submitted at the time of joining by the company.
3. Form-10: To be completed at the time of leaving the company.
4. Form-12: Monthly Return form.
5. Form-9: Register form.
Thanks,
Pramod Kumar Tripathi
From India, Faridabad
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The following are the forms used for PF purposes:
1. Form-2: Nomination Form/Declaration form to be filled when a new employee joins.
2. Form-5: To be submitted at the time of joining by the company.
3. Form-10: To be completed at the time of leaving the company.
4. Form-12: Monthly Return form.
5. Form-9: Register form.
Thanks,
Pramod Kumar Tripathi
From India, Faridabad
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