Can anyone please send me the notification where it has been recommended that PF is calculated on Basic Salary less HRA.
It is very much urgent.
Regards,
Praloy Narayan Bhar
From India, Vadodara
2It is very much urgent.
Regards,
Praloy Narayan Bhar
From India, Vadodara
The section 6 of Employees Provident Fund and Misc Provisions Act says that PF should be contributed on wages which should include basic wages and dearness allowance. Section 2(b) of the Act defines the term "BASIC WAGE" as the TOTAL amount/ emolument paid or payable to an employee. This section excludes HRA from the scope of PF contributing wages along with other allowances like dearness allowance, overtime allowance, bonus, commission and similar other allowances. if you extend the exclusion part you can exclude allowance which are not fixed in the contract of employment like that of other excluded allowances like overtime, commission, bonus or HRA. But in many cases, especially in private sector companies HRA is a fixed amount, and not a compensatory allowance. therefore, if the total salary on which PF is paid is less than Rs 15000, and again an element called HRA is deducted to find the PF qualifying salary, then the EPFO can ask whether this HRA is paid to all employees or is it paid as compensatory allowance only to those who reside in leased accommodation or those whose spouses are not in receipt of HRA?
Therefore, even though HRA is excluded the chances of getting it added to basic wages is very high in the cases where the PF is contributed on a wages of less than Rs 15000.
From India, Kannur
Therefore, even though HRA is excluded the chances of getting it added to basic wages is very high in the cases where the PF is contributed on a wages of less than Rs 15000.
From India, Kannur
HI, Apex court given a judgment PF wages means Gross salary excludes HRA PFA. here with Judgment. Kishore Babu
From India, Hyderabad
From India, Hyderabad
I think I have clarified the matter in the light of the various court observations only. It is to be understood that HRA in order to be excluded should be insignificant amount. In the cited case also, the court has said that "the HRA component is not that
exorbitant to say that it is deliberate split up to avoid provident fund deduction". But you should also rethink if the court was not in error when it observed that an amount of Rs 1123 paid as HRA when the gross salary itself is just Rs 4792 is insignificant or exorbitant amount.
From India, Kannur
exorbitant to say that it is deliberate split up to avoid provident fund deduction". But you should also rethink if the court was not in error when it observed that an amount of Rs 1123 paid as HRA when the gross salary itself is just Rs 4792 is insignificant or exorbitant amount.
From India, Kannur
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