Dear All
Need some clarification on change in Employer & Employee contribution to PF:
Employer and employee is currently contributing 12% of basic into PF (basic being higher than Rs. 6500/-); and employee now wants to restrict his/her contribution now to only 12% of Rs. 6500/- basic, ie. Rs. 780/- pm. Example -- Current Basic on which PF contributions are made is Rs. 15000 = Employer's contribution to PF is Rs. 1800. This method was applied last 6-7 years. Now both employer and employees (existing) would like to change this contribution to Rs. 780 each (Basic Rs. 6500*12%). Can this change in contribution be done without changing employee's CTC?
Purpose behind this request is that the employee wants a higher take home package. [ He will get his the amount from his reduced PF deductions plus the employer's reduced contributions as increased take home (net) sal.]
What are the implications from a statutory standpoint to implementing this change?
Appreciate some inputs on this
Regards
Prabhakar
From India, Bangalore
Need some clarification on change in Employer & Employee contribution to PF:
Employer and employee is currently contributing 12% of basic into PF (basic being higher than Rs. 6500/-); and employee now wants to restrict his/her contribution now to only 12% of Rs. 6500/- basic, ie. Rs. 780/- pm. Example -- Current Basic on which PF contributions are made is Rs. 15000 = Employer's contribution to PF is Rs. 1800. This method was applied last 6-7 years. Now both employer and employees (existing) would like to change this contribution to Rs. 780 each (Basic Rs. 6500*12%). Can this change in contribution be done without changing employee's CTC?
Purpose behind this request is that the employee wants a higher take home package. [ He will get his the amount from his reduced PF deductions plus the employer's reduced contributions as increased take home (net) sal.]
What are the implications from a statutory standpoint to implementing this change?
Appreciate some inputs on this
Regards
Prabhakar
From India, Bangalore
Hi Prabhakar,
We are also looking for the same information but not able to find it. Have you got the information about the same.
please share it with me also if you have got the information.
Thanks & Regards,
Prashant Kumar Pandey
From India, Delhi
We are also looking for the same information but not able to find it. Have you got the information about the same.
please share it with me also if you have got the information.
Thanks & Regards,
Prashant Kumar Pandey
From India, Delhi
Dear Friends,
we also thought on same long back. our PF & ESIC consultant advised us that it can be done easliy. but best is to from beginning of new financial year to avoid complication towards taxation and Form-16 of employees.
as far as statutory implications are concerned he told that though it is not required but you can provide a letter to PF department mentioning such changes.
but we didn't change that bcoz of few other reasons....
regards,
Nishu
From India, New Delhi
5we also thought on same long back. our PF & ESIC consultant advised us that it can be done easliy. but best is to from beginning of new financial year to avoid complication towards taxation and Form-16 of employees.
as far as statutory implications are concerned he told that though it is not required but you can provide a letter to PF department mentioning such changes.
but we didn't change that bcoz of few other reasons....
regards,
Nishu
From India, New Delhi
I'll like to put one more twist to the original question. Half of existing employees are willing to sign an undertaking that in future their PF be computed wrt Basic Pay of Rs. 6500 per month & the other half wants to continue with the existing methodology that PF be computed wrt full wages
From United States, Minneapolis
From United States, Minneapolis
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