:-PThank you Prathima for your response.
There are two different things in PF dedutions as per the discussions.
i) 12% of Basic
ii) Rs.780/-
My doubts are;
i) Is there any rule or relaxation about the Employer contribution can be fixed ceiling as Rs.780/- to employees who cross 6500/- as Basic;
ii) Is there any strict rule that we should deduct 12% from basic to employees of a new company which is going to introduce PF and all or can we restrict that also as Rs.780/- and
iii) What are all the questions will be encoutered when filing the returns with EPFO office, in case a company restricts its (Employer) contribution as Rs.780/- for those employees who cross Rs.6500/- as Basic and If so, how to defend and overcome with the PF officials?
Kinldy throw more lights on those lines.
regards,
Uniquenaga:icon1::icon1::icon1:
From India, Madras
1There are two different things in PF dedutions as per the discussions.
i) 12% of Basic
ii) Rs.780/-
My doubts are;
i) Is there any rule or relaxation about the Employer contribution can be fixed ceiling as Rs.780/- to employees who cross 6500/- as Basic;
ii) Is there any strict rule that we should deduct 12% from basic to employees of a new company which is going to introduce PF and all or can we restrict that also as Rs.780/- and
iii) What are all the questions will be encoutered when filing the returns with EPFO office, in case a company restricts its (Employer) contribution as Rs.780/- for those employees who cross Rs.6500/- as Basic and If so, how to defend and overcome with the PF officials?
Kinldy throw more lights on those lines.
regards,
Uniquenaga:icon1::icon1::icon1:
From India, Madras
Dear Virender,
I am disagree with the saying of Prathima, in this case the employee's contribution will be on the enhance wages (i.e. on 12500.00) till the month of September, he will be exempted from October onwards. For this support I am reproducing the Section 50 of the ESI Act, which will clear the doubts about the same.
50. Wage limit for coverage of employees under the Act
The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be [Six thousand five hundred] rupees a month:
PROVIDED that an employee whose wages (excluding remuneration for overtime work) exceed [Six thousand five hundred] rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
From India, Delhi
I am disagree with the saying of Prathima, in this case the employee's contribution will be on the enhance wages (i.e. on 12500.00) till the month of September, he will be exempted from October onwards. For this support I am reproducing the Section 50 of the ESI Act, which will clear the doubts about the same.
50. Wage limit for coverage of employees under the Act
The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be [Six thousand five hundred] rupees a month:
PROVIDED that an employee whose wages (excluding remuneration for overtime work) exceed [Six thousand five hundred] rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
From India, Delhi
Yes virendra rajiv is correct. The ESI will be deducted on the gross amount being received by the employee till september salary. From October salary he will be out of ESI but his coverage will continue for next 6 months and he can avail the ESI facility.
From India, Bangalore
From India, Bangalore
Dear Shilpi,
It is not mandatory to deduct PF form any employee's salary if his/her basic wages are more than Rs. 6500/-. As it is specified in the PF Act as "PF must be deducted from the salary of any employee drawing basic wages upto 6500/-.
But if your employer don't want to contribute/deduct PF on employee drawing more than 6500/-, you can get an undertaking in writing from the employee cpncerned regarding non contribution in PF and thus can evade a complex situation arising out of this..
From India, New Delhi
It is not mandatory to deduct PF form any employee's salary if his/her basic wages are more than Rs. 6500/-. As it is specified in the PF Act as "PF must be deducted from the salary of any employee drawing basic wages upto 6500/-.
But if your employer don't want to contribute/deduct PF on employee drawing more than 6500/-, you can get an undertaking in writing from the employee cpncerned regarding non contribution in PF and thus can evade a complex situation arising out of this..
From India, New Delhi
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From India, Delhi
From India, Delhi
Hi Prathima,
As PER MY experience with PF commissioner, PF Officials has right to ask for not deducting PF For consultant or any employee. So better keep ceiling limit and deduct and pay ..
Thanks
Mahesh
From India, Bangalore
As PER MY experience with PF commissioner, PF Officials has right to ask for not deducting PF For consultant or any employee. So better keep ceiling limit and deduct and pay ..
Thanks
Mahesh
From India, Bangalore
Dear Friends,Most of the contraventions are ok. For clarifcation please see the attached PF. CHECK LIST.(earlier posted by me). There is not maxium limit the cealing is Rs. 6500/- (Basic + DA) , if crosses he/she may call it as 'Exempted Employee' . But it is mandatory as a social security of the employees, so every RPF authorities may ask to deduct the PF @ Rs. 6500/- from every exempted employee. It is advisible such deduction which is execpted from Incom Tax perview. Regards,PBS KUMAR
From India, Kakinada
From India, Kakinada
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From India, Hyderabad
From India, Hyderabad
Hello All, If the contribution towards PF is more than Rs.780/month is it ok to reduce the amount to Rs.780/month Regards, Prasad
From India, Bangalore
From India, Bangalore
Dear Shilpi,
1) Law states that PF is mandatory for employees with basic salary limit less than or equal to Rs.6500/- but this cannot be mis-interpreted that employees with greater than Rs.6500/- need no coverage under PF. However, you can leave it to the option of the employee either to contribute upto Rs.6500/- or opt out.
2) On hiring if basic is already more than 6500/- do we need to contribute in PF as mandatory? - It is not mandatory but an option to be left to the decision of the employee.
3) Are any companies are there who are not contributing because the basic is more than 6500/-? - Yes. There are.
But, the best suggestion is not to provide facility to opt out, but to restrict the contribution upto Rs.6500/-. Thanks.
Regards
Hema
From India,
1) Law states that PF is mandatory for employees with basic salary limit less than or equal to Rs.6500/- but this cannot be mis-interpreted that employees with greater than Rs.6500/- need no coverage under PF. However, you can leave it to the option of the employee either to contribute upto Rs.6500/- or opt out.
2) On hiring if basic is already more than 6500/- do we need to contribute in PF as mandatory? - It is not mandatory but an option to be left to the decision of the employee.
3) Are any companies are there who are not contributing because the basic is more than 6500/-? - Yes. There are.
But, the best suggestion is not to provide facility to opt out, but to restrict the contribution upto Rs.6500/-. Thanks.
Regards
Hema
From India,
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SC Judgment-No obligation to excess contribution than Statutory Limit.docx
PF Contribution on Leave Encashment - Clarification by EPFO.pdf