Hi Every one,
i am working in a Construction Company based in Maharashtra. I want to know about Basic wages for computation of PF. Generally we are calculating PF on Gross Salary which includes Basic+HRA+Medical. As per the New amendment in the wage ceiling of Rs.15000/-, many of our employees are not ready for the extra burden. How can i do the working so that the burden will be less both on employee & employer. How can i work out the salary as per minimum wage.
Regards,
From India, Nagpur
i am working in a Construction Company based in Maharashtra. I want to know about Basic wages for computation of PF. Generally we are calculating PF on Gross Salary which includes Basic+HRA+Medical. As per the New amendment in the wage ceiling of Rs.15000/-, many of our employees are not ready for the extra burden. How can i do the working so that the burden will be less both on employee & employer. How can i work out the salary as per minimum wage.
Regards,
From India, Nagpur
Dear Member,
What you are doing is totally wrong. PF is not payable on gross. Now you can not reduce the salary for PF component. It seems you are mistaken conceptually and you are mistaken not only in PF but in other applicable laws too.
You need a person like me on retainership who can guide you from time to time. Answer to your query can not given in one post or at a stretch. This forum has many discussions on PF which you can read and arrive at right answer to you.
From India, Mumbai
2556What you are doing is totally wrong. PF is not payable on gross. Now you can not reduce the salary for PF component. It seems you are mistaken conceptually and you are mistaken not only in PF but in other applicable laws too.
You need a person like me on retainership who can guide you from time to time. Answer to your query can not given in one post or at a stretch. This forum has many discussions on PF which you can read and arrive at right answer to you.
From India, Mumbai
First : PF is to be computed on basic + da
You need to correct that.
There is of course, nothing to stop you from contributing extra (subject to approval of employee and total of all deduction not exceeding 50% of salary). But it is optional.
There is a Supreme Court ruling that you can revert to contributing PF on basic+da and up to salary ceiling (search the forum) at any time.
So, compute the PF on basic + da subject to ceiling of 15000. If the PF amount is similar to what you are already paying, your workers will be happy. Or at least the hit will be lower,.
But keep documentation and explanation ready, as the PF department is likely to ask questions.
Further, check how you filed the returns so far. If you stated your basic+allowances in the returns as basic, then you will have a Big problem. In that case, you need a good PF comsultant to work it out for you and liaison with the department to clear this.
From India, Mumbai
You need to correct that.
There is of course, nothing to stop you from contributing extra (subject to approval of employee and total of all deduction not exceeding 50% of salary). But it is optional.
There is a Supreme Court ruling that you can revert to contributing PF on basic+da and up to salary ceiling (search the forum) at any time.
So, compute the PF on basic + da subject to ceiling of 15000. If the PF amount is similar to what you are already paying, your workers will be happy. Or at least the hit will be lower,.
But keep documentation and explanation ready, as the PF department is likely to ask questions.
Further, check how you filed the returns so far. If you stated your basic+allowances in the returns as basic, then you will have a Big problem. In that case, you need a good PF comsultant to work it out for you and liaison with the department to clear this.
From India, Mumbai
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PF Judgment Supreme Court Basic Wages (1).pdf