In an organization, PF contribution is deducted from the actual basic salary since starting, i.e., 12% on 40,000/—, i.e. Rs. 4,800 per month.
To reduce the cost, now that the organization wants to deduct a PF contribution on Rs. 15,000/- i.e. Rs. 1,800/-
Is it possible to reduce the deduction amount for continuous employment?
From India, Kolkata
To reduce the cost, now that the organization wants to deduct a PF contribution on Rs. 15,000/- i.e. Rs. 1,800/-
Is it possible to reduce the deduction amount for continuous employment?
From India, Kolkata
Certainly YES.
Section 12 of the EPF and MP Act says that the employer should not reduce the salary on which PF is being contributed. This provision is meant to avoid the act of employers to reduce the salary just to reduce their burden of contribution. But this requirement will not be applicable to such cases where the contribution is made on Rs 15000. Yes, if the employer cannot make it on salary less than Rs 15000.
In Maratwada Gramin Bank case the Supreme Court ruled that the EPF Organisation cannot demand contribution on a salary above the threshold limit. Therefore, the employer can very well reduce the contribution from the actual salary to Rs 15000. The only thing to be borne in mind is that if the contribution of employer is one of the conditions of service, say included in the CTC, then changing the same would require consent of the employees, as mandated by section 9A of the Industrial Disputes Act.
From India, Kannur
4250Section 12 of the EPF and MP Act says that the employer should not reduce the salary on which PF is being contributed. This provision is meant to avoid the act of employers to reduce the salary just to reduce their burden of contribution. But this requirement will not be applicable to such cases where the contribution is made on Rs 15000. Yes, if the employer cannot make it on salary less than Rs 15000.
In Maratwada Gramin Bank case the Supreme Court ruled that the EPF Organisation cannot demand contribution on a salary above the threshold limit. Therefore, the employer can very well reduce the contribution from the actual salary to Rs 15000. The only thing to be borne in mind is that if the contribution of employer is one of the conditions of service, say included in the CTC, then changing the same would require consent of the employees, as mandated by section 9A of the Industrial Disputes Act.
From India, Kannur
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