Dear Sir, We never can not do it ,my question was if anyone has some other ideas to maintain both side employer as wall as pf compliance then let me know
From India, Shimla
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From India, Shimla
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Though I am not quite clear about the thrust of the questions, I am still trying to address #8 to #11 above, making some assumptions. Payment of only HRA may sound a bit bizarre, besides falling foul with some other statutes, even assuming that the amount paid is above what is prescribed under the Minimum Wages Act that stipulates a Basic Wage and a Special Allowance. The authorities are sure to assume that the amount paid is camouflaged wages, and they are not far from the truth.
I am also assuming that the questionnaire has a problem with Dearness Allowance that is shown as excluded in the definition of basic wages under Sec. 2 (b). If you read further, either the Act or the Case, you will realize that DA is getting covered for PF under Sec 6. To my mind, it is an anachronism found in the Act itself.
Post the SC judgment, the thumb rule to apply is that if you pay any amount across the board without the recipient having to do anything special to earn it (like incentive bonus), it would amount to a "universal" allowance applicable to all attracting PF.
From India, Nasik
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8I am also assuming that the questionnaire has a problem with Dearness Allowance that is shown as excluded in the definition of basic wages under Sec. 2 (b). If you read further, either the Act or the Case, you will realize that DA is getting covered for PF under Sec 6. To my mind, it is an anachronism found in the Act itself.
Post the SC judgment, the thumb rule to apply is that if you pay any amount across the board without the recipient having to do anything special to earn it (like incentive bonus), it would amount to a "universal" allowance applicable to all attracting PF.
From India, Nasik
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Basic salary is the key factor for all components, and HRA cannot exceed 40% of basic.
A knowledgeable HR professional will never allow the HR component to be split just based on percentages. Instead, they will engage the employee in a short discussion and request formal documents to avail the benefit of exempted allowances.
The HR job profile is not merely a routine task but requires coordination with all relevant departments, particularly those related to finance and labor.
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A knowledgeable HR professional will never allow the HR component to be split just based on percentages. Instead, they will engage the employee in a short discussion and request formal documents to avail the benefit of exempted allowances.
The HR job profile is not merely a routine task but requires coordination with all relevant departments, particularly those related to finance and labor.
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Dear All,
I am sharing herewith a recent Supreme Court judgment copy description by EPFO Vadodara chapter, Gujarat for your ready reference. I hope it will clear all your doubts. Please contact your regional EPFO office for any doubts regarding this presentation from EPFO itself.
All the best!!!
From India, Pune
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I am sharing herewith a recent Supreme Court judgment copy description by EPFO Vadodara chapter, Gujarat for your ready reference. I hope it will clear all your doubts. Please contact your regional EPFO office for any doubts regarding this presentation from EPFO itself.
All the best!!!
From India, Pune
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Dear All,
There is no way to save employer and employee liability. Only basic HRA ratio is a maximum of 60:40, or 70:30 if we increase the HRA percentage more than 40. EPFO will add the difference of HRA in basic wages and penalize them.
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There is no way to save employer and employee liability. Only basic HRA ratio is a maximum of 60:40, or 70:30 if we increase the HRA percentage more than 40. EPFO will add the difference of HRA in basic wages and penalize them.
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Respected All,
Thank you for your valuable suggestion on the aforementioned matter. One of my HR colleagues informed me that the company has changed its salary structure following the Supreme Court judgment. They have decided that, effective from 01/04/2019, the "Special Allowance" will now be referred to as "DEVELOPMENT ALLOWANCE" in your salary structure.
Please advise or share any insights you may have related to the DEVELOPMENT ALLOWANCE.
Thank you.
From India, Shimla
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Thank you for your valuable suggestion on the aforementioned matter. One of my HR colleagues informed me that the company has changed its salary structure following the Supreme Court judgment. They have decided that, effective from 01/04/2019, the "Special Allowance" will now be referred to as "DEVELOPMENT ALLOWANCE" in your salary structure.
Please advise or share any insights you may have related to the DEVELOPMENT ALLOWANCE.
Thank you.
From India, Shimla
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Dear All,
I also want to know about the development allowance. I saw many companies are doing the same thing. If anyone has any idea about it, kindly share. What percentage of development allowance can we include in our salary structure?
Thank you.
From India
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I also want to know about the development allowance. I saw many companies are doing the same thing. If anyone has any idea about it, kindly share. What percentage of development allowance can we include in our salary structure?
Thank you.
From India
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Hi,
I had attended a grievance program in Bangalore regarding the recent changes in the PF, and the PF assistant commissioner was the key person in the program. He confirmed that HRA components will not attract PF. Many have raised questions about fixing the HRA percentage. Since there is no proper rule for salary structure, he said it will be on a case-by-case basis.
As per my knowledge, salary components vary on a case-by-case basis, i.e., salary components will differ when a company is located in cities, villages, hilly areas, or coastal areas. For example, HRA cannot be the same for a company situated in a city and a village. Usually, in towns, rent will be higher. We have to fix HRA higher in these places. We also have to consider the Income Tax treatment. If HRA is less than the actual rent paid, it will affect the ability to claim HRA exemption in IT. All these issues apply only to those who are earning a salary of less than 15K.
My suggestion is that you can fix HRA at 20%-40% of the gross (24% is the safest option since government organizations in Bangalore maintain the same) if you are in a town. Frankly speaking, PF officials have the power to question your salary components, so you should have proper justification for your policy.
From India, Bengaluru
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I had attended a grievance program in Bangalore regarding the recent changes in the PF, and the PF assistant commissioner was the key person in the program. He confirmed that HRA components will not attract PF. Many have raised questions about fixing the HRA percentage. Since there is no proper rule for salary structure, he said it will be on a case-by-case basis.
As per my knowledge, salary components vary on a case-by-case basis, i.e., salary components will differ when a company is located in cities, villages, hilly areas, or coastal areas. For example, HRA cannot be the same for a company situated in a city and a village. Usually, in towns, rent will be higher. We have to fix HRA higher in these places. We also have to consider the Income Tax treatment. If HRA is less than the actual rent paid, it will affect the ability to claim HRA exemption in IT. All these issues apply only to those who are earning a salary of less than 15K.
My suggestion is that you can fix HRA at 20%-40% of the gross (24% is the safest option since government organizations in Bangalore maintain the same) if you are in a town. Frankly speaking, PF officials have the power to question your salary components, so you should have proper justification for your policy.
From India, Bengaluru
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Dear Muhammed Asif,
Our company is situated in Panchkula city. We can offer 60% of the basic salary and 40% of the gross salary as House Rent Allowance (HRA). Is this admissible? Kindly share your thoughts if you have any information regarding development allowance. I am eagerly awaiting your valuable suggestions.
Thank you.
From India
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Our company is situated in Panchkula city. We can offer 60% of the basic salary and 40% of the gross salary as House Rent Allowance (HRA). Is this admissible? Kindly share your thoughts if you have any information regarding development allowance. I am eagerly awaiting your valuable suggestions.
Thank you.
From India
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Dear Gaurav,
Whether the cost of living in your city is higher? As per my knowledge, the city Panchkula is a small city, so living costs are assumed to be lower. My suggestion is that you can fix the HRA at 30%. It would be better to consult your PF office regarding HRA and development allowance for more clarity, as they are the authority to inspect your organization.
Thank you.
From India, Bengaluru
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Whether the cost of living in your city is higher? As per my knowledge, the city Panchkula is a small city, so living costs are assumed to be lower. My suggestion is that you can fix the HRA at 30%. It would be better to consult your PF office regarding HRA and development allowance for more clarity, as they are the authority to inspect your organization.
Thank you.
From India, Bengaluru
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