Dear experts, Any advice here on EPF.
XYZ company is contributing EPF on actual basics higher than the wage limit INR15000/- as a universal policy to all employees. However, there are scenarios PF basic wages reduced below 15000/- due to loss of pay, unpaid pays, early relief of an employees due to settlements or joiners joined later stages of months. One of auditors observed it and said if PF wages reduced were in below INR 15000/- due to above scenarios, the contribution should go on inclusive all allowances (excluding HRA or variable pays) and make contributions till 1800/- .
Is it a right observation as per PF act? or can we challenge these observations in case compliance risks arises?
Thank you in advance of sharing POVs.
From India, Bangalore
1XYZ company is contributing EPF on actual basics higher than the wage limit INR15000/- as a universal policy to all employees. However, there are scenarios PF basic wages reduced below 15000/- due to loss of pay, unpaid pays, early relief of an employees due to settlements or joiners joined later stages of months. One of auditors observed it and said if PF wages reduced were in below INR 15000/- due to above scenarios, the contribution should go on inclusive all allowances (excluding HRA or variable pays) and make contributions till 1800/- .
Is it a right observation as per PF act? or can we challenge these observations in case compliance risks arises?
Thank you in advance of sharing POVs.
From India, Bangalore
EPF is contributed on EPF Wages it means Basic, DA & other allowances as well. As it is exceeding above Rs. 15,000/- it is not a constraint and if the same is getting reduced then better to consider DA & Other allowances as well
From India, Bangalore
From India, Bangalore
Auditor is right. But there will be cases when it will be difficult. Say Basic is 20,000/- per month and HRA is 10,000/- per month and monthly gross 30,000/- per month. Due to half month LOP, the Basic is come down to 10,000/- for the month , HRA 5,000/- FOR THE MONTH AND MONTHLY GROSS 15,000/- per month.
In the above case PF will be deducted on 10,000/- basic which is less than 15,000/ per month statutory limit.
S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
In the above case PF will be deducted on 10,000/- basic which is less than 15,000/ per month statutory limit.
S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
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