Previously, an employee was making Provident Fund (PF) contributions based on a higher wage. Is it possible for the employee to now cease this higher wage-based PF contribution and instead limit the PF contribution to the statutory limit of ₹1,800, which is 12% of ₹15,000?
From India, Bengaluru
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From India, Bengaluru
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Yes, an employee can choose to limit their Provident Fund (PF) contributions to the statutory limit. However, this decision should be communicated to the employer clearly and in writing. The employer, in turn, is required to implement this change in the PF contributions in the payroll system.
Here are the steps to follow:
1. The employee should write a formal letter to the employer, stating their desire to limit their PF contributions to the statutory limit of ₹1,800. This letter should be clear and concise, outlining the reasons for the change.
2. The employer should acknowledge receipt of this letter and take the necessary steps to implement the change. This includes adjusting the payroll system to reflect the new PF contribution amount.
3. The employee should ensure that the change has been implemented correctly by checking their pay slip. If there are any discrepancies, they should immediately notify their employer.
4. The employee should also update their records with the Employees' Provident Fund Organisation (EPFO) by visiting the official EPFO website https://www.epfindia.gov.in and logging into their account.
It's important to note that while the PF contribution can be limited to the statutory limit, the employee's take-home salary will increase. However, the retirement corpus will decrease as the PF contribution is reduced. Therefore, the employee should consider these factors before deciding to limit their PF contributions.
From India, Gurugram
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141Here are the steps to follow:
1. The employee should write a formal letter to the employer, stating their desire to limit their PF contributions to the statutory limit of ₹1,800. This letter should be clear and concise, outlining the reasons for the change.
2. The employer should acknowledge receipt of this letter and take the necessary steps to implement the change. This includes adjusting the payroll system to reflect the new PF contribution amount.
3. The employee should ensure that the change has been implemented correctly by checking their pay slip. If there are any discrepancies, they should immediately notify their employer.
4. The employee should also update their records with the Employees' Provident Fund Organisation (EPFO) by visiting the official EPFO website https://www.epfindia.gov.in and logging into their account.
It's important to note that while the PF contribution can be limited to the statutory limit, the employee's take-home salary will increase. However, the retirement corpus will decrease as the PF contribution is reduced. Therefore, the employee should consider these factors before deciding to limit their PF contributions.
From India, Gurugram
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Hi Shruthi
Ceiling limit under EPF is Rs. 15,000/- hence EPF shall be contributed on the same also there is provision to contribution on higher wages as well.
If at all you need to reduce to the ceiling limit then it is advisable to have declaration from all the employees
From India, Bangalore
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Ceiling limit under EPF is Rs. 15,000/- hence EPF shall be contributed on the same also there is provision to contribution on higher wages as well.
If at all you need to reduce to the ceiling limit then it is advisable to have declaration from all the employees
From India, Bangalore
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Thank you!
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CiteHR.AI
(Fact Checked)-Your information is correct. An employee can limit their PF contribution to the statutory limit with proper declaration. Keep sharing! (1 Acknowledge point)
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SC Judgment-No obligation to excess contribution than Statutory Limit.docx
No contribution on salary exceeding statutory limit under EPS 8.11.2013.pdf
Wage increase in between the contribution period.JPG
Shruthi-chandrashekar
Thank you! So the employer can reduce the higher wages to the normal statutory limit.