Dear Divya
As per Employee Provident Fund & Miscelleneous Provision Act 1952 If the employee’s emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer.
So it depends upon company's policy whether to deduct on limit of 6500/- or on Total Basic + DA.
But it will not depend upon employee to employee in same organisation i.e one company will deduct Pf @ 12% on Rs 6500/- and for another employee PF @ 12% on Rs 10000.00.
So it is clear that though employee Basic is high company has to on compulsory basis deduct the PF @ 12% on 6500/- and if low than on that basic.
Now I think is it clear to you. If you have more query on this topic than you can call me on 9909001742
Regards
Abhijeet Sawant
From India, Ahmadabad
8As per Employee Provident Fund & Miscelleneous Provision Act 1952 If the employee’s emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer.
So it depends upon company's policy whether to deduct on limit of 6500/- or on Total Basic + DA.
But it will not depend upon employee to employee in same organisation i.e one company will deduct Pf @ 12% on Rs 6500/- and for another employee PF @ 12% on Rs 10000.00.
So it is clear that though employee Basic is high company has to on compulsory basis deduct the PF @ 12% on 6500/- and if low than on that basic.
Now I think is it clear to you. If you have more query on this topic than you can call me on 9909001742
Regards
Abhijeet Sawant
From India, Ahmadabad
Hi , Shilpi is right, whenever your basic salary will increase but you can give on 6500/-. but if your comp. want to give more than it’s ok BR, Mahesh
From India, Mumbai
From India, Mumbai
Hi Divya / Manjali
It is correct hat PF should be on Basic +DA this is as per amendment dated 22.09.1997 in the Act, both the employees and emplyers contribute to the fund at the rate of 12%
& from the employeer 1.61% is going to be extra as Admn. charges by the employeer
And however if the limit crosses Rs.6500/- (i.e. 780/-) then if the employee wants more than that - A member, on his request is allowed to contribute more than the above rate subject to the condition that the employer shall not be under any obligation to pay any contribution over and above the contribution payable under the provisions of the Act.
Hope this will clear your doubts.
SLG ( Satish)
From India, Belgaum
It is correct hat PF should be on Basic +DA this is as per amendment dated 22.09.1997 in the Act, both the employees and emplyers contribute to the fund at the rate of 12%
& from the employeer 1.61% is going to be extra as Admn. charges by the employeer
And however if the limit crosses Rs.6500/- (i.e. 780/-) then if the employee wants more than that - A member, on his request is allowed to contribute more than the above rate subject to the condition that the employer shall not be under any obligation to pay any contribution over and above the contribution payable under the provisions of the Act.
Hope this will clear your doubts.
SLG ( Satish)
From India, Belgaum
Dear Divya,
There are different clauses in PF act.
In your friend's case the employer has all the rights to continue the contribution or not as your friend's basic is more than 6500. So, it depends on the employer.
If employer would like to contribute under the consideration of his budget he can contribute only on consideration of basic @ 6500.
Hope i made u clear
If any more doubts read PF act or reach me at
From India, Warangal
There are different clauses in PF act.
In your friend's case the employer has all the rights to continue the contribution or not as your friend's basic is more than 6500. So, it depends on the employer.
If employer would like to contribute under the consideration of his budget he can contribute only on consideration of basic @ 6500.
Hope i made u clear
If any more doubts read PF act or reach me at
From India, Warangal
Hi,
Thanks all.My friend's basic+DA is 12500 and not the gross.Everyone has posted different replies.Can anyone pls tell me what is as per the law?Is it as per the law that if the employer wishes he can choose to deduct only the min required amount(780)no matter what the actual basic is???
Cheers,
Divya
Hi Divya
there r two pf shares. one is employee pf and other is employer pf share. Employee share(12%) of basic goes to PF. and in employer share 8.33% goes to Pension and 3.67 goes to PF.
Basic for Employee PF share has no limit. But minimum basic should equal or more than minimum wages. Now for pension share we can not calculate 8.33% of basic is more than 6500. for this Basic is maximum 6500.
e.g.
A basic is Rs. 12500
his Employee pf is Rs.1500
Employer pf is Rs (8.33% of 6500)=542, other share is 1500-542=958
PF share is 2458 and Pension share is 542 while basic is 12500
but if basic is less or equal to Rs. 6500 then 8.33% calculate of actual basic.
hope it will help u
Prem chand
From India, New Delhi
Thanks all.My friend's basic+DA is 12500 and not the gross.Everyone has posted different replies.Can anyone pls tell me what is as per the law?Is it as per the law that if the employer wishes he can choose to deduct only the min required amount(780)no matter what the actual basic is???
Cheers,
Divya
Hi Divya
there r two pf shares. one is employee pf and other is employer pf share. Employee share(12%) of basic goes to PF. and in employer share 8.33% goes to Pension and 3.67 goes to PF.
Basic for Employee PF share has no limit. But minimum basic should equal or more than minimum wages. Now for pension share we can not calculate 8.33% of basic is more than 6500. for this Basic is maximum 6500.
e.g.
A basic is Rs. 12500
his Employee pf is Rs.1500
Employer pf is Rs (8.33% of 6500)=542, other share is 1500-542=958
PF share is 2458 and Pension share is 542 while basic is 12500
but if basic is less or equal to Rs. 6500 then 8.33% calculate of actual basic.
hope it will help u
Prem chand
From India, New Delhi
Dear
As per PF act the mandatory salary for which the employer is bound to contribute as PF is upto 6500/-(Basic + DA). Hence most of the companies follow this method and for all those whose Basic + DA exceeds 6500/- Pf is deducted 780/- only i.e. 12% of 6500/- and both the employee and employer contribute 780/- each towards PF. In certain cases the company agrees to contribute 12% of actual basic & DA but in those companies the individuals getting such BASic & Da can be counted on fingers.
Statutorily the employer has to contribute maximum upto 780/- per employee towards PF.
Hope ur query is clear now.
From India, Vadodara
As per PF act the mandatory salary for which the employer is bound to contribute as PF is upto 6500/-(Basic + DA). Hence most of the companies follow this method and for all those whose Basic + DA exceeds 6500/- Pf is deducted 780/- only i.e. 12% of 6500/- and both the employee and employer contribute 780/- each towards PF. In certain cases the company agrees to contribute 12% of actual basic & DA but in those companies the individuals getting such BASic & Da can be counted on fingers.
Statutorily the employer has to contribute maximum upto 780/- per employee towards PF.
Hope ur query is clear now.
From India, Vadodara
Hi All,
In case of PF contribution...the employer libality is limited upto Rs 6500...and generally they deduct the same from employeee's contribution....but if employee wants to contribute more in PF, He/she can always make a request to deduct his PF upto whatever level he wants...max upto basic salary.
Secondly, employee also has right to get his PF deducted more than 12%....but in all cases employee can not ask employer to increase employers contribution .....it employers discretion whether to increase his contribution....his liability is upto Rs 6500.
If any employee is getting basic salary more than 6500 per month, then employers are not liable to contribute PF...means if salary is upto 6500, then employer is liable for PF (as per the act)...in any case where salary is more than 6500...its entirely the discretion of management..whether to contribute PF or not.
I hope this will be helpful.
Rgds
Sant
From India
In case of PF contribution...the employer libality is limited upto Rs 6500...and generally they deduct the same from employeee's contribution....but if employee wants to contribute more in PF, He/she can always make a request to deduct his PF upto whatever level he wants...max upto basic salary.
Secondly, employee also has right to get his PF deducted more than 12%....but in all cases employee can not ask employer to increase employers contribution .....it employers discretion whether to increase his contribution....his liability is upto Rs 6500.
If any employee is getting basic salary more than 6500 per month, then employers are not liable to contribute PF...means if salary is upto 6500, then employer is liable for PF (as per the act)...in any case where salary is more than 6500...its entirely the discretion of management..whether to contribute PF or not.
I hope this will be helpful.
Rgds
Sant
From India
Hi
PF amount can be deducted on the salary / wages which is more than Rs.6500/-, but with the mutual consent of the employer. There is absolutely no limit for such excess voluntary contribution of the employee as per the PF rules in force.
Maximum limit for deduction of PF as per the act is on salary / wage of Rs.6500.00, (Basic + DA) Employees who are members of PF before they cross the limit of 6500.00 salary / wage, can continue with PF contributions, but PF contributions only only on Rs.6500.00 ( Basic + DA ).
Employee join with a Basic + DA which is more than Rs.6500.00, for them the employer have all the right to not deduct any PF Contributions or pay his share of PF contributions.
Mohan Rao
Manager HR
From India, Visakhapatnam
PF amount can be deducted on the salary / wages which is more than Rs.6500/-, but with the mutual consent of the employer. There is absolutely no limit for such excess voluntary contribution of the employee as per the PF rules in force.
Maximum limit for deduction of PF as per the act is on salary / wage of Rs.6500.00, (Basic + DA) Employees who are members of PF before they cross the limit of 6500.00 salary / wage, can continue with PF contributions, but PF contributions only only on Rs.6500.00 ( Basic + DA ).
Employee join with a Basic + DA which is more than Rs.6500.00, for them the employer have all the right to not deduct any PF Contributions or pay his share of PF contributions.
Mohan Rao
Manager HR
From India, Visakhapatnam
Hi Divya,
In response to your query regarding deduction of PF & contribution from the persons drawing more than Rs6500/-(Basic +DA), it is cleared that as per paras 2(1) of the EPF scheme 1952 an employee whose pay at the time he isotherwise entitled to a member of the fund, exceeds allowance, retaining allowance and cash of food etc. is an excluded employees.
Prashant Kulkarni
From India, Mumbai
In response to your query regarding deduction of PF & contribution from the persons drawing more than Rs6500/-(Basic +DA), it is cleared that as per paras 2(1) of the EPF scheme 1952 an employee whose pay at the time he isotherwise entitled to a member of the fund, exceeds allowance, retaining allowance and cash of food etc. is an excluded employees.
Prashant Kulkarni
From India, Mumbai
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf