hi
to every one
i m new in this forum,
plz any one explin me the concept of leave encashment under PF act, as per my knowledge employer contribution of 12% is divided in to 8.33% for pension scheme and rest for PF, BUT NOW IF A EMLOYEE gets 8500 for leave encashment and for example his basic salary is 6000 and DA is 500 per month so now the PF should be deducted on (6000+500+8500) ie 15000 and 12% of it 1800 os now sum of rs. 541( max contribution under pension limit up to 6500) is for pension and rest of 1259 is for PF
plz clear me the concept
i will be thank ful to you
with regards,
Richa Jain
CA final student
E-mail
From United Kingdom, London
to every one
i m new in this forum,
plz any one explin me the concept of leave encashment under PF act, as per my knowledge employer contribution of 12% is divided in to 8.33% for pension scheme and rest for PF, BUT NOW IF A EMLOYEE gets 8500 for leave encashment and for example his basic salary is 6000 and DA is 500 per month so now the PF should be deducted on (6000+500+8500) ie 15000 and 12% of it 1800 os now sum of rs. 541( max contribution under pension limit up to 6500) is for pension and rest of 1259 is for PF
plz clear me the concept
i will be thank ful to you
with regards,
Richa Jain
CA final student
From United Kingdom, London
Hi Richa,
Whatever may be leave encashment amount, maximum amount of Rs. 541/- only will go to his pension fund, the remaining amount will go to PF.
In any case, the amount of pension fund will not exceed Rs. 541/- (Even though you may pay leave encashment alongwith salary/wages)
Hope the above will satisfy you.
Feels good to have communication at least written commn. with a CA.
Santosh Iyer
From India, Pune
12Whatever may be leave encashment amount, maximum amount of Rs. 541/- only will go to his pension fund, the remaining amount will go to PF.
In any case, the amount of pension fund will not exceed Rs. 541/- (Even though you may pay leave encashment alongwith salary/wages)
Hope the above will satisfy you.
Feels good to have communication at least written commn. with a CA.
Santosh Iyer
From India, Pune
hi santosh
thanx for replying
could you clear me the whole concept of leave encashment for PF,
there are so many issues on this like:
>is leave encashment resticated to only Basic+DA
>and if the accoumalated leave on which encashment is received more than 30 days than what shoul do?
>is it applicable with restrospective effect?
with regards,
Richa Jain
From United Kingdom, London
thanx for replying
could you clear me the whole concept of leave encashment for PF,
there are so many issues on this like:
>is leave encashment resticated to only Basic+DA
>and if the accoumalated leave on which encashment is received more than 30 days than what shoul do?
>is it applicable with restrospective effect?
with regards,
Richa Jain
From United Kingdom, London
Richi,
1. Yes, leave encashment is done on (BASIC+DA) only, however some companies have different terminologies i.e. (BASIC+FDA+VDA), BASIC+SP.ALL (DA). In no condition would any other allowance be added for calculation of PF.
2. Regarding accumulation of leaves, it depends the leave policy varies from company to company. Some companies lapse the leaves at the end of the year, some companies carry forward half or some no. of leaves, while other carry forward all the leaves.
Santosh Iyer
From India, Pune
1. Yes, leave encashment is done on (BASIC+DA) only, however some companies have different terminologies i.e. (BASIC+FDA+VDA), BASIC+SP.ALL (DA). In no condition would any other allowance be added for calculation of PF.
2. Regarding accumulation of leaves, it depends the leave policy varies from company to company. Some companies lapse the leaves at the end of the year, some companies carry forward half or some no. of leaves, while other carry forward all the leaves.
Santosh Iyer
From India, Pune
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SC -PF judgment on No PF on Leave encashment.doc
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