Hello all i wanted to know that as pf ceiling is 6500 bt still people hving sal more than 6500, there is pf deduction in salary. why so? wat is %(employee n employer share) n on wat basis?
From India, Mumbai
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From India, Mumbai
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Hi Chuggani,
Though the PF ceiling limit is 6500.00, those people who have a basic salary higher than 6500.00 are eligible for PF deduction. You can deduct 12% of their actual basic salary for PF or consider their basic as 6500.00 for PF deduction. Deduction of PF is mandatory by law if you have more than 20 employees on the payroll.
Moreover, 12% is deducted from the employee's salary, which directly contributes to the PF, and 12% is contributed by the employer. Out of the employer's share, 8.33% goes to the Employees' Pension Scheme, and 3.67% is again deposited into the employees' PF account.
I believe the above explanation addresses both of your queries.
Thanks,
Amit
From India, Mumbai
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8Though the PF ceiling limit is 6500.00, those people who have a basic salary higher than 6500.00 are eligible for PF deduction. You can deduct 12% of their actual basic salary for PF or consider their basic as 6500.00 for PF deduction. Deduction of PF is mandatory by law if you have more than 20 employees on the payroll.
Moreover, 12% is deducted from the employee's salary, which directly contributes to the PF, and 12% is contributed by the employer. Out of the employer's share, 8.33% goes to the Employees' Pension Scheme, and 3.67% is again deposited into the employees' PF account.
I believe the above explanation addresses both of your queries.
Thanks,
Amit
From India, Mumbai
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Hi Amit,
I have some doubts about the Rs 6500 limit that you mentioned in your post. Please clarify if an employee crosses Rs 6500 in basic salary, whether the calculation is based on their actual basic salary or only Rs 6500. As per my understanding, an employee will have the option to choose PF if their basic salary exceeds Rs 6500.
Kindly correct and clarify this for me.
Regards,
Amith R.
From India, Bangalore
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I have some doubts about the Rs 6500 limit that you mentioned in your post. Please clarify if an employee crosses Rs 6500 in basic salary, whether the calculation is based on their actual basic salary or only Rs 6500. As per my understanding, an employee will have the option to choose PF if their basic salary exceeds Rs 6500.
Kindly correct and clarify this for me.
Regards,
Amith R.
From India, Bangalore
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Dear Amit,
You are right. It's the employees' choice whether they opt for the 6500.00 or the actual basic. However, in some organizations, it is the management policy to curtail the liability expenses, so those who have crossed the limit of 6500.00 basic will be considered as basic 6500.00 for PF deduction. This was a practice followed in my first organization where I worked for almost 5 years.
I hope your doubt is clear.
Thanks,
Amit
From India, Mumbai
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You are right. It's the employees' choice whether they opt for the 6500.00 or the actual basic. However, in some organizations, it is the management policy to curtail the liability expenses, so those who have crossed the limit of 6500.00 basic will be considered as basic 6500.00 for PF deduction. This was a practice followed in my first organization where I worked for almost 5 years.
I hope your doubt is clear.
Thanks,
Amit
From India, Mumbai
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Dear all,
If any employee's basic salary is greater than 6500, you mentioned that there is an option not to deduct over 6500. However, in the salary sheet, how do we differentiate between employees with salaries less than 6500 and those greater than 6500? If there is an audit by the PF department, employees might question why some are covered by PF while others are not.
Please guide us on whether we should deduct PF for employees with a basic salary exceeding 6500 and how to reflect this on the salary sheet.
Kindly email me regarding this matter at my ID: rajnish_sapra2005@yahoo.com.
Regards,
Rajnish Sapra
From India, Delhi
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If any employee's basic salary is greater than 6500, you mentioned that there is an option not to deduct over 6500. However, in the salary sheet, how do we differentiate between employees with salaries less than 6500 and those greater than 6500? If there is an audit by the PF department, employees might question why some are covered by PF while others are not.
Please guide us on whether we should deduct PF for employees with a basic salary exceeding 6500 and how to reflect this on the salary sheet.
Kindly email me regarding this matter at my ID: rajnish_sapra2005@yahoo.com.
Regards,
Rajnish Sapra
From India, Delhi
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Hi Amit,
Thank you for your explanation. I now understand, but I also wanted to know what is the use of the PF ceiling of 6500? Is 6500 considered as gross or basic?
If an employee has a basic salary of 16000 and his basic is 5600, will PF be deducted or not?
Thank you.
From India, Mumbai
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Thank you for your explanation. I now understand, but I also wanted to know what is the use of the PF ceiling of 6500? Is 6500 considered as gross or basic?
If an employee has a basic salary of 16000 and his basic is 5600, will PF be deducted or not?
Thank you.
From India, Mumbai
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Dear Gaurav
If employee basic salary is more than 6500/- and that specific employee is not earlier the member of provident fund, under such circumstances if employees not desire to become the member of provident fund than he may be treated as “Excluded Employee u/s 2.1.3. Of EPF & MP Act 1952(Para 2 (f) of E.P. Scheme.
But before that you can fill up declaration from those specific employees who are not desire to become the member of P.F.
Regards,
Dipak
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If employee basic salary is more than 6500/- and that specific employee is not earlier the member of provident fund, under such circumstances if employees not desire to become the member of provident fund than he may be treated as “Excluded Employee u/s 2.1.3. Of EPF & MP Act 1952(Para 2 (f) of E.P. Scheme.
But before that you can fill up declaration from those specific employees who are not desire to become the member of P.F.
Regards,
Dipak
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Dear All,
I would like to bring to your notice that the PF limit is Rs. 6,500. So, the employer is bound to pay their contribution on Rs. 6,500 only. If the employer pays more than that, it is treated as follows:
Example:
Basic = 10,000
Employee 12% = Rs. 1,200
Employer 12% = Rs. 1,200
The contribution will go into the Pension Account with only 8.33% of Rs. 6,500, i.e., Rs. 541; the rest will go into EPF, i.e., Rs. 1,859.
I hope this clears all your queries.
Regards,
Jitender
From India, New Delhi
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I would like to bring to your notice that the PF limit is Rs. 6,500. So, the employer is bound to pay their contribution on Rs. 6,500 only. If the employer pays more than that, it is treated as follows:
Example:
Basic = 10,000
Employee 12% = Rs. 1,200
Employer 12% = Rs. 1,200
The contribution will go into the Pension Account with only 8.33% of Rs. 6,500, i.e., Rs. 541; the rest will go into EPF, i.e., Rs. 1,859.
I hope this clears all your queries.
Regards,
Jitender
From India, New Delhi
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Hi All,
Provident fund is a type of employee benefit that involves contributions from both employers and employees. It is a common practice in many companies to deduct the PF from the employee's salary and include it in the CTC as an added advantage, with the employer also contributing 12%.
The salary ceiling is Rs. 6500/-, meaning that deductions are compulsory for salaries less than Rs. 6500.
Regards,
Pradnya
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Provident fund is a type of employee benefit that involves contributions from both employers and employees. It is a common practice in many companies to deduct the PF from the employee's salary and include it in the CTC as an added advantage, with the employer also contributing 12%.
The salary ceiling is Rs. 6500/-, meaning that deductions are compulsory for salaries less than Rs. 6500.
Regards,
Pradnya
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Dear Amit,
Thank you very much. I will definitely keep in touch with you.
Dear Friends,
I would like to know if an employee quits within six months and wants to apply for PF, should they fill out both Form 10c and Form 19 or only Form 10c? In my opinion, only Form 10c should be submitted. Can you clarify this for me?
Regards,
Amith R.
From India, Bangalore
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Thank you very much. I will definitely keep in touch with you.
Dear Friends,
I would like to know if an employee quits within six months and wants to apply for PF, should they fill out both Form 10c and Form 19 or only Form 10c? In my opinion, only Form 10c should be submitted. Can you clarify this for me?
Regards,
Amith R.
From India, Bangalore
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PF Ledger.xls