In view of this judgement, there are a lot of apprehensions raised by employers and employees about their liability and the take-home salary. I have shared my views on the judgement as interpreted by me. Please follow the link: [https://madhu-t-k.blogspot.com/2019/03/provident-fund-qualifying-salary-and_6.html](https://madhu-t-k.blogspot.com/2019/03/provident-fund-qualifying-salary-and_6.html).
Madhu T K
From India, Kannur
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4771Madhu T K
From India, Kannur
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After Supreme court judgement, now how we can bifurcation employee Salary structure as per rules. Please guide me.
From India, Nagpur
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From India, Nagpur
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Dear Mr. Madhu,
I went through your blog. Good read. One more point to note is that in the case of employers who mention the employer's contribution in their CTC structure, if the employer now decides to restrict the employer's contribution to Rs. 15,000 wages, i.e., to Rs. 1,800 per month, then the employee's CTC will decrease. Therefore, they would need to compensate for the reduction in some other component, which would again attract PF contribution. There is a limit to how much an employer can increase the HRA as there are percentage restrictions according to the HRA Act.
We still need clarity on when to start implementing the change as per the Supreme Court ruling.
Regards
From India, Mumbai
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I went through your blog. Good read. One more point to note is that in the case of employers who mention the employer's contribution in their CTC structure, if the employer now decides to restrict the employer's contribution to Rs. 15,000 wages, i.e., to Rs. 1,800 per month, then the employee's CTC will decrease. Therefore, they would need to compensate for the reduction in some other component, which would again attract PF contribution. There is a limit to how much an employer can increase the HRA as there are percentage restrictions according to the HRA Act.
We still need clarity on when to start implementing the change as per the Supreme Court ruling.
Regards
From India, Mumbai
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In the case of employees whose contributing salary is already Rs. 15,000, any addition to special allowance will not make any difference. For example, your total salary is Rs. 150,000 and your basic pay on which PF is deducted is Rs. 50,000. That means Rs. 6,000 is your employer's contribution included in the CTC, i.e., Rs. 156,000 per month. Now if the employer reduces it to 12% of 15,000, then the share will be Rs. 1,800. Since the CTC of Rs. 156,000 is already agreed with you, the difference of Rs. 4,200 will be paid to you by the employer, and this can be paid to you under any head because this will not attract PF since the PF is contributed on Rs. 15,000.
Now it is not necessary that the employer can only contribute on Rs. 15,000; he can contribute it on any amount and for that there is no limit, in fact.
From India, Kannur
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Now it is not necessary that the employer can only contribute on Rs. 15,000; he can contribute it on any amount and for that there is no limit, in fact.
From India, Kannur
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Good read...
I have a query. If an employee's gross is 19000 per month and the salary break-up is as given below:
Basic - 10000
HRA - 3000 (30% of Basic)
All Allowances - 6000
How can we restructure or deposit the PF contribution for the above case in the current scenario?
Regards,
Ramandeep Singh
From India, Pune
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I have a query. If an employee's gross is 19000 per month and the salary break-up is as given below:
Basic - 10000
HRA - 3000 (30% of Basic)
All Allowances - 6000
How can we restructure or deposit the PF contribution for the above case in the current scenario?
Regards,
Ramandeep Singh
From India, Pune
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Thank you Mr. Madhu. Could you confirm whether it is advisable to start implementing the change or we should still wait for the implementation ?
From India, Mumbai
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From India, Mumbai
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On a salary of Rs. 19,000, you will have to pay PF on at least Rs. 15,000. That is gross salary less HRA, subject to a maximum of Rs. 15,000.
You can start paying contributions now; no need to wait for any further notification to come.
From India, Kannur
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You can start paying contributions now; no need to wait for any further notification to come.
From India, Kannur
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Is it mandatory to pay on Rs 15k, if basic is 70% of total package and balance are in allowances like if someone is getting 2ok , out of this 14 k is basic and balance only 6k is in allowances
From India, New Delhi
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From India, New Delhi
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