Dear Seniors,
I am from Hyderabad working as a manager in a pharmaceutical company.
My Salary Structure is as follows:
Basic: 12260
HRA: 7969
Bonus: 1021
TA: 800
Spl Allowance: 12179
CCA: 0
Education Allowance: 0
Total: 35029
My Deductions
PF: 1471 (12% of Basic)
PT: 200
In view of a notice received from an Enforcement Officer to clarify the special allowance not being included for PF calculations, kindly clarify the following points please.
1. Is the calculation of PF i.e. 1471 which is 12% on Basic (12260) correct?
2. I understand HRA, Bonus & TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong.
3. Should we include the special allowance i.e Rs. 12179 for calculation of PF along with Basic?
4. With the above salary structure are we going against the law? If yes, kindly where we are doing the mistake in calculations.
Thanking You
From India, Hyderabad
1I am from Hyderabad working as a manager in a pharmaceutical company.
My Salary Structure is as follows:
Basic: 12260
HRA: 7969
Bonus: 1021
TA: 800
Spl Allowance: 12179
CCA: 0
Education Allowance: 0
Total: 35029
My Deductions
PF: 1471 (12% of Basic)
PT: 200
In view of a notice received from an Enforcement Officer to clarify the special allowance not being included for PF calculations, kindly clarify the following points please.
1. Is the calculation of PF i.e. 1471 which is 12% on Basic (12260) correct?
2. I understand HRA, Bonus & TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong.
3. Should we include the special allowance i.e Rs. 12179 for calculation of PF along with Basic?
4. With the above salary structure are we going against the law? If yes, kindly where we are doing the mistake in calculations.
Thanking You
From India, Hyderabad
1. Is the calculation of PF i.e. 1471 which is 12% on Basic (12260) correct?
Yes
2. I understand HRA, Bonus & TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong.
Except Basic and DA, no other allowances are required to be deducted for EPF contributions. There are several case laws available to substantiate this point. The same can be shown to epf authorities for reference.
3. Should we include the special allowance i.e Rs. 12179 for calculation of PF along with Basic?
Not required. Unless employee wanted it to include it as voluntary contribution.
4. With the above salary structure are we going against the law? If yes, kindly where we are doing the mistake in calculations.
There is nothing against law in the above structure, as far as your employer also paying their contribution of 13.65% of your basic excluding your 12%
From India, Chennai
Yes
2. I understand HRA, Bonus & TA in the above breakup need not be included for PF calculations. Please correct me if I am wrong.
Except Basic and DA, no other allowances are required to be deducted for EPF contributions. There are several case laws available to substantiate this point. The same can be shown to epf authorities for reference.
3. Should we include the special allowance i.e Rs. 12179 for calculation of PF along with Basic?
Not required. Unless employee wanted it to include it as voluntary contribution.
4. With the above salary structure are we going against the law? If yes, kindly where we are doing the mistake in calculations.
There is nothing against law in the above structure, as far as your employer also paying their contribution of 13.65% of your basic excluding your 12%
From India, Chennai
Thank you Mr. Stephen.
That was indeed a clear reply. I confirm you that ours is CTC and both the contributions are being paid as per the laws.
Secondly, It will be helpful for us if you can refer the case laws you were mentioning or at least show us the way, where to check on net or get in the form of books, it will be of great help.
Thirdly, in the salary structure given earlier by me instead of "Special Allowance", "Flexi Benefit Pay" was used but the amount is the same. Will this update change your response? Please do let us know.
Thanking You once again for the help.
From India, Hyderabad
That was indeed a clear reply. I confirm you that ours is CTC and both the contributions are being paid as per the laws.
Secondly, It will be helpful for us if you can refer the case laws you were mentioning or at least show us the way, where to check on net or get in the form of books, it will be of great help.
Thirdly, in the salary structure given earlier by me instead of "Special Allowance", "Flexi Benefit Pay" was used but the amount is the same. Will this update change your response? Please do let us know.
Thanking You once again for the help.
From India, Hyderabad
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls