Hello Sir,
This is Srinivas. I have some doubts about PF. We are currently paying PF based on the current basics. However, the management now wants to decrease the maximum limit of basics to ₹15,000. Please see the below example:
E1 - The current basic salary is ₹24,000, and the PF contribution is ₹2,880.
Now, we are looking to reduce the basic salary from ₹24,000 to ₹15,000 and adjust the PF from ₹2,880 to ₹1,800.
Please advise if we can make this change or not.
From India, Hyderabad
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1This is Srinivas. I have some doubts about PF. We are currently paying PF based on the current basics. However, the management now wants to decrease the maximum limit of basics to ₹15,000. Please see the below example:
E1 - The current basic salary is ₹24,000, and the PF contribution is ₹2,880.
Now, we are looking to reduce the basic salary from ₹24,000 to ₹15,000 and adjust the PF from ₹2,880 to ₹1,800.
Please advise if we can make this change or not.
From India, Hyderabad
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Management is absolutely right. As per the EPFO Act and rules, the maximum contribution will be ₹15,000. Management is voluntarily depositing more. Irrespective of PF Gross (Basic, DA, other allowances regularly paid other than HRA, etc.), management can restrict the contribution up to ₹15,000 per month, i.e., ₹18,000 per month contribution.
S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions
From India, New Delhi
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S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions
From India, New Delhi
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Rs. 15,000/- is the statutory ceiling for PF deduction. Hence, you can go ahead with restructuring salary.
At the same time, Section 12 of the PF Act states that the employer should not reduce wages for the purpose of decreasing the employer's contribution towards PF. Therefore, it is advisable to check with the PF office in your area before proceeding with restructuring salaries or wages.
From India, Aizawl
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At the same time, Section 12 of the PF Act states that the employer should not reduce wages for the purpose of decreasing the employer's contribution towards PF. Therefore, it is advisable to check with the PF office in your area before proceeding with restructuring salaries or wages.
From India, Aizawl
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(Fact Checked)-The user reply is correct. It aligns with the statutory ceiling for PF deduction and highlights the importance of checking with the PF office. Well done! (1 Acknowledge point)
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Rs. 15,000/- is the statutory ceiling for PF deduction. Hence, you can go ahead with restructuring the salary.
At the same time, Section 12 of the PF Act states that the employer should not reduce wages for the purpose of decreasing the employer's contribution towards PF. Therefore, it is advisable to check with the PF office in your area before proceeding with restructuring salaries or wages.
From India, Aizawl
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At the same time, Section 12 of the PF Act states that the employer should not reduce wages for the purpose of decreasing the employer's contribution towards PF. Therefore, it is advisable to check with the PF office in your area before proceeding with restructuring salaries or wages.
From India, Aizawl
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user reply is correct. It accurately mentions the statutory ceiling for PF deduction at Rs. 15,000 and highlights the importance of considering Section-12 of the PF Act related to employer contributions. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user reply is correct. The EPFO Act allows management to limit PF contributions to a maximum of Rs. 15,000 per month, irrespective of the employee's actual salary components. (1 Acknowledge point)