One of my client based in Pune is deducting PF contribution from the salary of the employees of the company on their Actual Basic Salary drawn . For e.g. If Basic Salary is Rs. 19,000/- then they deduct PF Contribution of Rs. 2280 (i.e. 12% of Rs. 19,000/-). If Basic Salary is Rs. 23,000/- then they deduct PF Contribution of Rs. 2760 (i.e. 12% of Rs. 23,000/-) and equal amount is contributed by the employer also as per the PF Act.
Recently , they came to know that they should deduct PF contribution on the statutory cap of Rs. 15, 000/- and not on the Actual Basic Salary drawn.
Query -
1. Can they now change the practice of deducting PF contribution on the Actual Basic salary and start deducting PF on the statutory prescribed cap of Rs. 15,000/- p.m. as the Basic salary in respect of all its existing employees ?
2. If the answer to above is NO then can they do it for new employees joining from this/next month?
3. If the answer to above is YES then can they do it immediately or wait for the new financial year to start?
From India, Pune
1Recently , they came to know that they should deduct PF contribution on the statutory cap of Rs. 15, 000/- and not on the Actual Basic Salary drawn.
Query -
1. Can they now change the practice of deducting PF contribution on the Actual Basic salary and start deducting PF on the statutory prescribed cap of Rs. 15,000/- p.m. as the Basic salary in respect of all its existing employees ?
2. If the answer to above is NO then can they do it for new employees joining from this/next month?
3. If the answer to above is YES then can they do it immediately or wait for the new financial year to start?
From India, Pune
1. Can now they change the practice of deducting PF contribution on the Actual Basic salary and start deducting PF on the statutory prescribed cap of Rs. 15,000/- p.m. as the Basic salary in respect of all its existing employees ? - You can do so with due consent from all employees in written & request letter to PF authorities to do such change
2. If the answer to above is NO then can they do it for new employees joining from this/next month? - With employee consent you can keep current PF ceiling of 15000.00
3. If the answer to above is YES then can they do it immediately or wait for the new financial year to start? - Can do immediately if due information to all employees well as PF authorities.
From India, Pune
2. If the answer to above is NO then can they do it for new employees joining from this/next month? - With employee consent you can keep current PF ceiling of 15000.00
3. If the answer to above is YES then can they do it immediately or wait for the new financial year to start? - Can do immediately if due information to all employees well as PF authorities.
From India, Pune
Thank You Prashantji for your quick response.
On oral inquiry with the PF Authorities, they stated that you cannot change your practice for existing employees but for new employees you can deduct it on statutory cap of Rs. 15,000/-.
If we put our issue in writing to the PF Authorities, do you think they will reply differently because the deducting PF Contribution on statutory cap of Rs. 15,000/- is perfectly in accordance with PF scheme, 1952.
From India, Pune
On oral inquiry with the PF Authorities, they stated that you cannot change your practice for existing employees but for new employees you can deduct it on statutory cap of Rs. 15,000/-.
If we put our issue in writing to the PF Authorities, do you think they will reply differently because the deducting PF Contribution on statutory cap of Rs. 15,000/- is perfectly in accordance with PF scheme, 1952.
From India, Pune
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf