HI to every one
i am facing a problem from last days
that when we deduct PF on leave encashment, and leave encashment amount is inclusive of HRA than is it liable for PF deduction or HRA should be excluded from leave encashment amount at the time of PF deduction?
plz help me and plz quote any legal reference in this regard?
From United Kingdom, London
i am facing a problem from last days
that when we deduct PF on leave encashment, and leave encashment amount is inclusive of HRA than is it liable for PF deduction or HRA should be excluded from leave encashment amount at the time of PF deduction?
plz help me and plz quote any legal reference in this regard?
From United Kingdom, London
Hi Richa, You should exclude the amount of HRA as you were thinking and then do the leave encashment for the employees. All the best Regards, Rohit K.
From India, Mumbai
1From India, Mumbai
Richa,
Herewith details for you.
Basic Wages:
"Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash, but does not include
The cash value of any food concession;
Any dearness allowance (that is to say, all cash payment by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other allowance payable to the employee in respect of employment or of work done in such employment.
Any present made by the employer.
Explanation:
'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value of food concessions admissible thereon.
Hope the above would satisfy you.
Santosh Iyer
From India, Pune
Herewith details for you.
Basic Wages:
"Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash, but does not include
The cash value of any food concession;
Any dearness allowance (that is to say, all cash payment by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other allowance payable to the employee in respect of employment or of work done in such employment.
Any present made by the employer.
Explanation:
'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value of food concessions admissible thereon.
Hope the above would satisfy you.
Santosh Iyer
From India, Pune
Hi Richa,
My self Rakesh Kumar Sharma,from gurgaon, first off all, please go through the mentioned below details of PF Act 1952.
CONTRIBUTION OF EMPLOYERS
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) of Sub-Section(1) of Section 3 of the sick industrial companies ( special provisions ) Act 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction.
Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
It is mean's that your dissison to exclude HRA for PF calculation is OK. For further clerification you may go logon to http://epfindia.com <link updated to site home>
Regards,
Rakesh Kumar Sharma
9810680048
My self Rakesh Kumar Sharma,from gurgaon, first off all, please go through the mentioned below details of PF Act 1952.
CONTRIBUTION OF EMPLOYERS
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) of Sub-Section(1) of Section 3 of the sick industrial companies ( special provisions ) Act 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction.
Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
It is mean's that your dissison to exclude HRA for PF calculation is OK. For further clerification you may go logon to http://epfindia.com <link updated to site home>
Regards,
Rakesh Kumar Sharma
9810680048
Hi Lavanya, Yes, PF should be deducted on EL encashment at the time of settlement. Regards, Rakesh Kumar Sharma 9810680048
Hi Richa, You have to pay PF on leave encashment as per the definition of wage. Therefore minus HRA whatever is the amount pay PF on that Regards
From India, Jamshedpur
From India, Jamshedpur
Dear All,
As per latest Court rulings, PF has to be deducted on leave encashment.There are no ifs and buts on that. At the time of final settlement, you encash remaining leaves of the employee, therefore PF has to be deducted. As far as HRA is concerned, PF is not deductable on it.
KKT
From India, Delhi
As per latest Court rulings, PF has to be deducted on leave encashment.There are no ifs and buts on that. At the time of final settlement, you encash remaining leaves of the employee, therefore PF has to be deducted. As far as HRA is concerned, PF is not deductable on it.
KKT
From India, Delhi
hello i am prajkta marathe from maharashtra i have one query regading this concept . in our organisation pf is deducted only on basic & da not on hra or on retaining allow . please suggest whether this system is right or wrong
regards,
prajkta
From India, Pune
regards,
prajkta
From India, Pune
Hi Prajakta, PF is been deducted on Basic and DA only.. HRA is not included while deducting PF, so your organisation is doing right.. Regards, Amit Seth.
From India, Ahmadabad
From India, Ahmadabad
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