Hi Friends,
I have one question. As per the new PF rule, I am coming under PF contribution, as my basic slab is between 6500 to 15000. Initially, I was told that your in-hand salary would be around 17500 where no PF was getting deducted. But now PF will be deducted around Rs. 1600. My question is, who should contribute, the employer or employee, from their salary.
Does the same need to be deducted from my current CTC, or does the employer have to make provisions for the same by adding that amount to CTC? I am confused because my take-home pay is reduced. Kindly note that no PF was deducted earlier, and now it will be. Please help me urgently as I have to discuss this with my HR.
From India, Mumbai
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I have one question. As per the new PF rule, I am coming under PF contribution, as my basic slab is between 6500 to 15000. Initially, I was told that your in-hand salary would be around 17500 where no PF was getting deducted. But now PF will be deducted around Rs. 1600. My question is, who should contribute, the employer or employee, from their salary.
Does the same need to be deducted from my current CTC, or does the employer have to make provisions for the same by adding that amount to CTC? I am confused because my take-home pay is reduced. Kindly note that no PF was deducted earlier, and now it will be. Please help me urgently as I have to discuss this with my HR.
From India, Mumbai
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Hi,
1. Earlier, if your basic was below 6500, then the contribution was mandatory.
2. Now, starting from the 1st of September, according to the new PF slab, if the basic is below 15000, the contribution is mandatory.
3. If you are referring to CTC which includes both employee and employer contributions, it will affect your net salary.
From India, Mumbai
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4541. Earlier, if your basic was below 6500, then the contribution was mandatory.
2. Now, starting from the 1st of September, according to the new PF slab, if the basic is below 15000, the contribution is mandatory.
3. If you are referring to CTC which includes both employee and employer contributions, it will affect your net salary.
From India, Mumbai
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Hi Ravi,
Thanks for the early reply. Earlier, my basic was more than 6500, so no PF was deducted. But now, as the slab has been increased, our HR is telling me that they will deduct the PF amount from my salary, i.e., CTC. This deduction will reduce my take-home pay. Can you suggest any ways to maintain my current take-home pay without reduction and ensure that the employer makes a separate contribution as required?
From India, Mumbai
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Thanks for the early reply. Earlier, my basic was more than 6500, so no PF was deducted. But now, as the slab has been increased, our HR is telling me that they will deduct the PF amount from my salary, i.e., CTC. This deduction will reduce my take-home pay. Can you suggest any ways to maintain my current take-home pay without reduction and ensure that the employer makes a separate contribution as required?
From India, Mumbai
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Dear Kushalvj,
If the PF contribution is ₹1600/-, both the employee and employer have to remit ₹1600/- each. Hence, there is no need for anxiety as your payment will get doubled with interest (due to equal contribution from the employer).
Abbas.P.S
From India, Bangalore
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If the PF contribution is ₹1600/-, both the employee and employer have to remit ₹1600/- each. Hence, there is no need for anxiety as your payment will get doubled with interest (due to equal contribution from the employer).
Abbas.P.S
From India, Bangalore
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So 1600 will be deducted from my current ctc and 1600 will be added from employer right?
From India, Mumbai
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From India, Mumbai
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Yes, your contribution amount will be deducted from your take-home pay, and the employer's contribution will be paid by the company. However, because the employer's contribution to PF also forms part of the CTC, in cases where employment is based on CTC, the take-home pay is adjusted accordingly by certain employers to cover additional PF costs. It is advisable to confirm with your employer whether the CTC has been revised or if the take-home pay has been adjusted.
From India, Gwalior
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From India, Gwalior
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Hi Kushal V.J,
The Employees' Provident Fund Scheme was introduced in 1952, and subsequently, there were amendments in the scheme. I am not understanding why you are worried about your PF deductions. You must be happy that a certain amount is being deducted from your salary, and the equal amount will be contributed by your employer, thus the total amount is being credited to your PF account, which is a saving for you for your future and has the exemption under 80C of the Income Tax Act, 1961.
My sincere advice to you is not to worry about the PF deduction. You should happily contribute as per the scheme. While your take-home salary may be less as of today, it may affect you, but your asset will grow, which will help you after your retirement. Do not only think of today. Your contribution will be in your name with EPFO, and nobody will snatch this. You will get your contribution amount at any time by applying Form No.19 in case you change the company, or you can continue until your retirement. There is a provision to take an advance from your Provident Fund under 16 for your marriage, sister's marriage, housing loan repayment, in case of hospitalization, etc. You know that government employees are contributing their share under GPF, which does not have any contribution from the government. They will get their own contribution with interest. Government employees prefer this scheme because of the saving point of view and tax exemption.
Myself and many contributing members have clearly explained in this thread, and please go through the same. Do not skip from the contribution.
Adoni Suguresh Sr. Executive (Pers, Admin & Ind. Rels) Rtd Labour Laws Consultant
From India, Bidar
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The Employees' Provident Fund Scheme was introduced in 1952, and subsequently, there were amendments in the scheme. I am not understanding why you are worried about your PF deductions. You must be happy that a certain amount is being deducted from your salary, and the equal amount will be contributed by your employer, thus the total amount is being credited to your PF account, which is a saving for you for your future and has the exemption under 80C of the Income Tax Act, 1961.
My sincere advice to you is not to worry about the PF deduction. You should happily contribute as per the scheme. While your take-home salary may be less as of today, it may affect you, but your asset will grow, which will help you after your retirement. Do not only think of today. Your contribution will be in your name with EPFO, and nobody will snatch this. You will get your contribution amount at any time by applying Form No.19 in case you change the company, or you can continue until your retirement. There is a provision to take an advance from your Provident Fund under 16 for your marriage, sister's marriage, housing loan repayment, in case of hospitalization, etc. You know that government employees are contributing their share under GPF, which does not have any contribution from the government. They will get their own contribution with interest. Government employees prefer this scheme because of the saving point of view and tax exemption.
Myself and many contributing members have clearly explained in this thread, and please go through the same. Do not skip from the contribution.
Adoni Suguresh Sr. Executive (Pers, Admin & Ind. Rels) Rtd Labour Laws Consultant
From India, Bidar
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf