It is very much confusing. One more article is being circulated which attaching for further insight. Pls go through. Prashant
From India, Bhubaneswar
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From India, Bhubaneswar
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According to the provisions of the Employees Provident Funds Scheme, it is very clear that cessation of membership does not arise once the member reaches Rs. 6500. The member remains a member unless he quits the job or settles his account; otherwise, it is mandatory to contribute up to the mandatory limit. Regarding basic wages, it is still ambiguous, but as per the provisions of the Act, basic wages are clearly defined with certain exclusions, which are valid till date.
It is important to refer to the EPF scheme Section 26 to clarify this point. Additionally, Section 27 addresses the exemption of an employee from EPF, but proving that the employee is receiving better benefits from other Industrial Acts is necessary to qualify for this exemption. It is advisable not to pursue this exemption without thorough consideration.
As for the notification concerning the inclusion of all allowances, it holds no significance unless the act is amended. If not, any such inclusion may be challenged in a court of law and potentially withdrawn, as has happened previously.
Stay Cool,
Atom
From India, Hyderabad
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It is important to refer to the EPF scheme Section 26 to clarify this point. Additionally, Section 27 addresses the exemption of an employee from EPF, but proving that the employee is receiving better benefits from other Industrial Acts is necessary to qualify for this exemption. It is advisable not to pursue this exemption without thorough consideration.
As for the notification concerning the inclusion of all allowances, it holds no significance unless the act is amended. If not, any such inclusion may be challenged in a court of law and potentially withdrawn, as has happened previously.
Stay Cool,
Atom
From India, Hyderabad
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Hi Monika,
The ceiling limit of PF Eligibility amount Rs. 6500/- is not mandatory but rather optional. The PF contribution may be remitted for employees whose basic salary is more than Rs. 6500/-, and there is no upper wage limit on the basic salary mutually agreed upon by the employer and employee.
FYI, the current circular published on 30th Nov 2012 in the newspaper has not been enforced or approved by the relevant Government authority to date.
Regards,
Rajib Mondal,
Dy. Manager-HR,
CIAL, Durgapur
9333563905
From India
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2The ceiling limit of PF Eligibility amount Rs. 6500/- is not mandatory but rather optional. The PF contribution may be remitted for employees whose basic salary is more than Rs. 6500/-, and there is no upper wage limit on the basic salary mutually agreed upon by the employer and employee.
FYI, the current circular published on 30th Nov 2012 in the newspaper has not been enforced or approved by the relevant Government authority to date.
Regards,
Rajib Mondal,
Dy. Manager-HR,
CIAL, Durgapur
9333563905
From India
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Dear Monika,
The latest news has not yet been updated by the PF Authority for all concerned individuals. If an employee's basic salary exceeds Rs. 6500 and they do not wish to continue, you can mark their name as resigned for this month in the PF records. Subsequently, you can rejoin their name in the register. Upon rejoining, only ESI deductions up to a gross salary of Rs. 15000 should be made, with the employee's basic salary exceeding Rs. 6500 indicating an exemption from PF contributions.
Thank you.
From India, Chennai
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The latest news has not yet been updated by the PF Authority for all concerned individuals. If an employee's basic salary exceeds Rs. 6500 and they do not wish to continue, you can mark their name as resigned for this month in the PF records. Subsequently, you can rejoin their name in the register. Upon rejoining, only ESI deductions up to a gross salary of Rs. 15000 should be made, with the employee's basic salary exceeding Rs. 6500 indicating an exemption from PF contributions.
Thank you.
From India, Chennai
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You cannot act like that. Once a member of the fund transitions to new employment, they must submit Form 11, which is mandatory. This form requires the furnishing of previous service details. Similarly, you cannot simply depict the situation as a resignation and new joining, as this could lead to legal proceedings against both the employee and the employer. Do not take compliance with statutes lightly. Edify compliance planners.
From India, Hyderabad
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From India, Hyderabad
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To All,
Best of knowledge, I would like to shed light on the above issue. I hope the copy of the PF or Circular released has any worth. Any change in the Act or Amendment should be passed by Parliament; only then will it be considered. Until then, there is no need to worry about the issues mentioned in the Times of India newspaper.
I hope you all understand my point. Until Parliament releases the Government Order (GO), the situation will continue the same way.
Regards,
B. Anand Kumar
From United Kingdom, London
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Best of knowledge, I would like to shed light on the above issue. I hope the copy of the PF or Circular released has any worth. Any change in the Act or Amendment should be passed by Parliament; only then will it be considered. Until then, there is no need to worry about the issues mentioned in the Times of India newspaper.
I hope you all understand my point. Until Parliament releases the Government Order (GO), the situation will continue the same way.
Regards,
B. Anand Kumar
From United Kingdom, London
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Actually i have informed what the PF Enrollment Officer informed to us when there was an inspection in our organisation. I didnt mention my own ideas...
From India, Chennai
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From India, Chennai
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Dear All,
This entire week was panic not only to HR commodity but to all working community. I will say that the TOI has created this panic by publishing the article on front page giving broad headline “Save more in PF, take home lower salary every month” and that too without studying all this aspect of EPF&MP Act 1952. The article is misleading with examples which created panic amongst all.
In our CiteHr there are many postings in different threads on this topic. Many viewer viewed the postings. I appreciate the posting by the members but very few discussions I found to be really meaningful.
By this time many experts have given their opinion on this subject. Shri. B.C. Prabhakar, President- Karnataka Employers’ Association who came out with Circular to its members. The said circular is posted in our CiteHr by Shri. Sasidharan Kollery, which is available to us. Shri. Vivek Sang who has posted clipping of Hindu dated 13.12.2012 which says maintain status quo on the circular- said by Union Labour and Employment Minister.
With this, the matter is now clear to all. But still I wish to give some points. This points I wish to give in every thread which I came across on this topic. This may be repeated but helpful in easy understanding.
The Circular in this context is an internal circular giving guidelines to its officers for quasi-judicial proceedings under section 7A. The Sr. 12 in this circular on splitting of wages is an explanation or clarification on the definition of Basic wages which is bit confusing one and probably half way attempt by the officer who signed on his last day of retirement.
There is no mention in this circular as regards to Paragraph 2(f) and or Paragraph 26A. This means both this Paragraph are unchanged.
There is no change in Paragraph 2(f) and or Paragraph 26A. EPFO can not make change in this Paragraph. Any amendment in law can not be done by such kind of internal circular. No one has any right to do it.
The said paragraphs are given below for ready reference:
Paragraph 2(f) of the EPF scheme defines an excluded employee as an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 6,500/- per month. The explanation to the paragraph defines the pay to include basic wages with D.A, Retainers allowance if any and cash value of food concession admissible thereon.
Paragraph 26A which contains the provisions with regard to retention of PF membership stipulates that where a monthly pay of a member exceeds Rs.6500/- per month the contribution payable by him and in respect of such employee by the employer, shall be limited to the amounts payable on a monthly pay of Rs.6500/- including D.A, Retention Allowance if any and cash value of food concession.
The question of whether the allowances should be taken into account for the purpose of PF contribution is still pending adjudication before the Supreme Court.
According to me the inclusion of all allowances for the purpose of EPF contribution will not affect much to majority. It will affect to those who are paying basic less than minimum wage rate.
Hope, now there remain no doubts in the mind of any body.
Thank and regards.
Keshav Korgaonkar
From India, Mumbai
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This entire week was panic not only to HR commodity but to all working community. I will say that the TOI has created this panic by publishing the article on front page giving broad headline “Save more in PF, take home lower salary every month” and that too without studying all this aspect of EPF&MP Act 1952. The article is misleading with examples which created panic amongst all.
In our CiteHr there are many postings in different threads on this topic. Many viewer viewed the postings. I appreciate the posting by the members but very few discussions I found to be really meaningful.
By this time many experts have given their opinion on this subject. Shri. B.C. Prabhakar, President- Karnataka Employers’ Association who came out with Circular to its members. The said circular is posted in our CiteHr by Shri. Sasidharan Kollery, which is available to us. Shri. Vivek Sang who has posted clipping of Hindu dated 13.12.2012 which says maintain status quo on the circular- said by Union Labour and Employment Minister.
With this, the matter is now clear to all. But still I wish to give some points. This points I wish to give in every thread which I came across on this topic. This may be repeated but helpful in easy understanding.
The Circular in this context is an internal circular giving guidelines to its officers for quasi-judicial proceedings under section 7A. The Sr. 12 in this circular on splitting of wages is an explanation or clarification on the definition of Basic wages which is bit confusing one and probably half way attempt by the officer who signed on his last day of retirement.
There is no mention in this circular as regards to Paragraph 2(f) and or Paragraph 26A. This means both this Paragraph are unchanged.
There is no change in Paragraph 2(f) and or Paragraph 26A. EPFO can not make change in this Paragraph. Any amendment in law can not be done by such kind of internal circular. No one has any right to do it.
The said paragraphs are given below for ready reference:
Paragraph 2(f) of the EPF scheme defines an excluded employee as an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 6,500/- per month. The explanation to the paragraph defines the pay to include basic wages with D.A, Retainers allowance if any and cash value of food concession admissible thereon.
Paragraph 26A which contains the provisions with regard to retention of PF membership stipulates that where a monthly pay of a member exceeds Rs.6500/- per month the contribution payable by him and in respect of such employee by the employer, shall be limited to the amounts payable on a monthly pay of Rs.6500/- including D.A, Retention Allowance if any and cash value of food concession.
The question of whether the allowances should be taken into account for the purpose of PF contribution is still pending adjudication before the Supreme Court.
According to me the inclusion of all allowances for the purpose of EPF contribution will not affect much to majority. It will affect to those who are paying basic less than minimum wage rate.
Hope, now there remain no doubts in the mind of any body.
Thank and regards.
Keshav Korgaonkar
From India, Mumbai
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Epfo-circular-d t-23-sept-2016- declaration-for m-new-form-11.p df