Hello Every one,
In this article they have mentioned we need to take all the components for calculation of PF. My query is do we need to keep limit of Rs.6500/- (6500*12%=Rs.780/-) minimum or do we need to actual amount of all components. If its require to take all components without any minimum limitation (Rs.6500),then from which date we have to apply this law. Kindly can any one clarify this issue.
Thanks & Regards,
Sheela
From India, Coimbatore
5In this article they have mentioned we need to take all the components for calculation of PF. My query is do we need to keep limit of Rs.6500/- (6500*12%=Rs.780/-) minimum or do we need to actual amount of all components. If its require to take all components without any minimum limitation (Rs.6500),then from which date we have to apply this law. Kindly can any one clarify this issue.
Thanks & Regards,
Sheela
From India, Coimbatore
Dear Sir, As per my view EPF limit is 6500 if any one contributing more than this.it is not bound to pay as per this notification. regards Nishant
From India, Ranchi
From India, Ranchi
Hi all This will come as an amendment and then we have start implementing the same, this is not very clear. Regards Gopal
From India, Mumbai
From India, Mumbai
In my view,
We should not go by the heading of News papers. There is no binding either on employers or on employees to contribute PF on more than Rs.6500/-. If salary of an employee on which PF contribution made is Rs.6500/- or more, employer can restrict contribution on any amount of Rs.6500 or more and similarly employee.
This circular will effect low paid employees whose Basic salary (for the purpose of contribution to PF) after bifurcation was less than Rs.6500. If their salary is Rs.6500 or more they have to contribute on atleast Rs.6500/-. On the flip side, this will be beneficial to these employees by saving more for future in continuous rising inflation scenario. Company will not be affected much as they pay the employees on CTC basis and can manage the situation to restrict contribution on more than Rs.6500/-
Regards
SK
From India, Delhi
We should not go by the heading of News papers. There is no binding either on employers or on employees to contribute PF on more than Rs.6500/-. If salary of an employee on which PF contribution made is Rs.6500/- or more, employer can restrict contribution on any amount of Rs.6500 or more and similarly employee.
This circular will effect low paid employees whose Basic salary (for the purpose of contribution to PF) after bifurcation was less than Rs.6500. If their salary is Rs.6500 or more they have to contribute on atleast Rs.6500/-. On the flip side, this will be beneficial to these employees by saving more for future in continuous rising inflation scenario. Company will not be affected much as they pay the employees on CTC basis and can manage the situation to restrict contribution on more than Rs.6500/-
Regards
SK
From India, Delhi
Dear Friends, Please go through the attachment of Different Concept of Minimum Wages. Regards, Arihant
From India, Surat
From India, Surat
In many organisations, EPF is calculated not against the amount of Rs. 6,500 but against the higher pay (salary plus DA). The article does mention that in such cases
"Proviso to paragraph 26A of the PF Scheme allows PF contributions by the employee as well as the employees on a maximum notional level of Rs 6,500 per month, instead of the entire salary (including various allowances). The rate remains the same at 12% each for the employer and employee contributions respectively.Not many employers have opted for this route, as PF is part of the employees cost to company and it also gives a tax shield to the employees. Now, if the employer organisation suddenly wishes to exercise this option and compute PF contributions only against Rs 6, 500 per month (instead of the higher salary amount earlier), it is not clear whether the PF authorities will oblige,"
Member SK12, rightly said If their salary is Rs.6500 or more they have to contribute on atleast Rs.6500/-. However, if they have contributed against a higher sum in the past, the issue is whether the PF authorities will now accept contribution against a sum of Rs. 6,500.
From India, Mumbai
"Proviso to paragraph 26A of the PF Scheme allows PF contributions by the employee as well as the employees on a maximum notional level of Rs 6,500 per month, instead of the entire salary (including various allowances). The rate remains the same at 12% each for the employer and employee contributions respectively.Not many employers have opted for this route, as PF is part of the employees cost to company and it also gives a tax shield to the employees. Now, if the employer organisation suddenly wishes to exercise this option and compute PF contributions only against Rs 6, 500 per month (instead of the higher salary amount earlier), it is not clear whether the PF authorities will oblige,"
Member SK12, rightly said If their salary is Rs.6500 or more they have to contribute on atleast Rs.6500/-. However, if they have contributed against a higher sum in the past, the issue is whether the PF authorities will now accept contribution against a sum of Rs. 6,500.
From India, Mumbai
Dear all,
Definitely it is going to affect on the employees who are drawing less salary. But I think HRA (House rent allowance) is excluded.
Please throw more light on what is included & what is excluded.
Thanking you all in advance.
From India, Kolhapur
Definitely it is going to affect on the employees who are drawing less salary. But I think HRA (House rent allowance) is excluded.
Please throw more light on what is included & what is excluded.
Thanking you all in advance.
From India, Kolhapur
Shrinisar: The definition of basic wages under the PF Act specifically excludes HRA. It is useful to read all earlier judicial decisions to determine what allowances can be added back to the basic wages, on the grounds that wages were split up to lower PF contribution. The problem is also acute for companies which kept basic wages lower than the sum total of various other allowances, and where the PF was not computed against the minimum of Rs. 6500.
From India, Mumbai
From India, Mumbai
I am continuing with above post.
The PF office is not clarifying whether for an employee where EPF was earlier not computed against Rs. 6500, but much higher sum of salary, can now seek that EPF be computed against Rs. 6500 only.
I take a band salary range: Basic salary was 50,000 - allowances are Rs. 40,000. Employee is okay with EPF against Rs. 50,000. Not okay with EPF against Rs. 90,000.
Can employer organisation now compute EPF against Rs. 6.500. Besides consent letter from employee, is thee any form to fill in?
I will update after meeting EPF office.
From India, Mumbai
The PF office is not clarifying whether for an employee where EPF was earlier not computed against Rs. 6500, but much higher sum of salary, can now seek that EPF be computed against Rs. 6500 only.
I take a band salary range: Basic salary was 50,000 - allowances are Rs. 40,000. Employee is okay with EPF against Rs. 50,000. Not okay with EPF against Rs. 90,000.
Can employer organisation now compute EPF against Rs. 6.500. Besides consent letter from employee, is thee any form to fill in?
I will update after meeting EPF office.
From India, Mumbai
There is good news. The circular of November 30 has been kept in abeyance according to labour law reporter.
PROVIDENT FUND CIRCULAR KEPT IN ABEYANCE : LABOUR MINISTER
Union Labour and Employment Minister Mallikarjun Kharge on 13th December, 2012 said that the Circular November 30th, 2012 pertaining to Guidelines for Quasi-judicial proceedings under section 7A of the EPF&MP Act, 1952 issued by the EPFO on the inclusion of certain allowances etc. for calculating Provident Fund contribution is to be kept in abeyance. So the status quo will continue.
Editor
LABOUR LAW REPORTER
From India, Mumbai
PROVIDENT FUND CIRCULAR KEPT IN ABEYANCE : LABOUR MINISTER
Union Labour and Employment Minister Mallikarjun Kharge on 13th December, 2012 said that the Circular November 30th, 2012 pertaining to Guidelines for Quasi-judicial proceedings under section 7A of the EPF&MP Act, 1952 issued by the EPFO on the inclusion of certain allowances etc. for calculating Provident Fund contribution is to be kept in abeyance. So the status quo will continue.
Editor
LABOUR LAW REPORTER
From India, Mumbai
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Provident fund.zip
PROVIDENT FUND.rar
PROVIDENT FUND.doc