Dear All,
I have 2 queries...
1) Is it compulsory to cover a person under PF if he was covered under PF in his last organisation?
2) What if basic is more that 6500 and a person wants to cover under PF.
(780 Rs is contribute by employer's side and rest amount is contributed by employees part)- is it legal?
From India, Delhi
14I have 2 queries...
1) Is it compulsory to cover a person under PF if he was covered under PF in his last organisation?
2) What if basic is more that 6500 and a person wants to cover under PF.
(780 Rs is contribute by employer's side and rest amount is contributed by employees part)- is it legal?
From India, Delhi
Reena:
1. An employee whose Basic + DA is more than 6500rs at the time of joininng a new company can opt out of the PF Scheme even if he was covered under PF in the previous company.
2. If the Basic + DA is more than rs.6500, then the company can set a limit to deduct the PF contribution to Rs.6500/- which is Rs. 780. Hence, Employee would contribute 780rs and Employer would contribute 780rs and administration charges of 1.61%.
Pls note that the employee and the employer has an option to deduct the PF contribution on total basic + da. However, They can limit the contribution to Rs.6500/- as per the Law.
From India, Thana
1. An employee whose Basic + DA is more than 6500rs at the time of joininng a new company can opt out of the PF Scheme even if he was covered under PF in the previous company.
2. If the Basic + DA is more than rs.6500, then the company can set a limit to deduct the PF contribution to Rs.6500/- which is Rs. 780. Hence, Employee would contribute 780rs and Employer would contribute 780rs and administration charges of 1.61%.
Pls note that the employee and the employer has an option to deduct the PF contribution on total basic + da. However, They can limit the contribution to Rs.6500/- as per the Law.
From India, Thana
Dear Manasi, What if basic+DA is less than 6500 and he was covered under PF in his last organisation, then is it compulsory for new employer to give him PF even if candidate does not want it.
From India, Delhi
From India, Delhi
Dear Reena:
If the Basic + DA in the previous company is less than Rs.6500/- and PF is contributed, there can be two possibilities in the salary offered by the new company:
1. Basic + DA less than Rs.6500/- : PF is compulsory, irrespective of whether the employee was covered in PF scheme in the previous organization.
2. Basic + DA more than Rs.6500/- :Employee and Employer can come to any of the the following conclusion:
a. Employee can opt for not getting covered under PF. Hence, No PF contribution from employee and employer end.
b. Employer can set a limit of Rs.6500/- and can contribute PF on that which comes to Rs.780/-. Hence, Employee and Employer share Rs. 780/- each. Additional admin charges to employer 1.61%.
c. Employee can wish to contribute on whole Basic + DA offered irrespective of the amount. E.g Rs. 8000 is Basic + DA, hence employee contribution would be 12% of Rs.8000 = Rs.960. However, Employer can set the limitation of contributing on Rs.6500/-. Hence, Employer contribution would be 780Rs. Additional admin charges to employer 1.61%.
d. Employee and Employer both can contribute on the whole Basic + DA amount. e.g Rs.8000 Basic + DA so Employee and Employer share would be Rs.960 each. Additional admin charges to employer 1.61%.
Hope this resolves your query. Pls feel free to call me at 9867670755 for any discussion.
From India, Thana
If the Basic + DA in the previous company is less than Rs.6500/- and PF is contributed, there can be two possibilities in the salary offered by the new company:
1. Basic + DA less than Rs.6500/- : PF is compulsory, irrespective of whether the employee was covered in PF scheme in the previous organization.
2. Basic + DA more than Rs.6500/- :Employee and Employer can come to any of the the following conclusion:
a. Employee can opt for not getting covered under PF. Hence, No PF contribution from employee and employer end.
b. Employer can set a limit of Rs.6500/- and can contribute PF on that which comes to Rs.780/-. Hence, Employee and Employer share Rs. 780/- each. Additional admin charges to employer 1.61%.
c. Employee can wish to contribute on whole Basic + DA offered irrespective of the amount. E.g Rs. 8000 is Basic + DA, hence employee contribution would be 12% of Rs.8000 = Rs.960. However, Employer can set the limitation of contributing on Rs.6500/-. Hence, Employer contribution would be 780Rs. Additional admin charges to employer 1.61%.
d. Employee and Employer both can contribute on the whole Basic + DA amount. e.g Rs.8000 Basic + DA so Employee and Employer share would be Rs.960 each. Additional admin charges to employer 1.61%.
Hope this resolves your query. Pls feel free to call me at 9867670755 for any discussion.
From India, Thana
Hi Manani,
read your comments and impresed with the knowledge, I needed few clarifications on the below doubts, please help me.
1. What if few employees want to have limit of PF contribution set to Rs 6500 and few on total BA+DA.
Since our system does not allow both the configurations at the same time.
2. My company wants to open new company where all employees will have more than Rs 6500 as BA and DA then is it compulsory to enroll to PF?
Thank you in advance
-Sunil
From India, Pune
read your comments and impresed with the knowledge, I needed few clarifications on the below doubts, please help me.
1. What if few employees want to have limit of PF contribution set to Rs 6500 and few on total BA+DA.
Since our system does not allow both the configurations at the same time.
2. My company wants to open new company where all employees will have more than Rs 6500 as BA and DA then is it compulsory to enroll to PF?
Thank you in advance
-Sunil
From India, Pune
Dear Manasi ji,
I thing you are making some conceptual mistakes in your reply.
With due respect to you madam, I draw your kind attention to Paragraph 2(f) of the EPF scheme which defines an excluded employee is 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.
Please be noted that once a person is member of PF, he is a member of PF life long in this service if the Act is applicable to his establishment.
Now, the section 6 of the Act says that the contribution which shall be paid by the employer to the Fund shall be 12 per cent of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable to each of the employees, (whether employed by him directly or by or through a contractor) and the employees' contribution shall be equal to the contribution payable by the employer in respect of him and may if any employee so desires, be an amount exceeding 12 per cent of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section:
This means member can contribute voluntarily to the provident fund an amount exceeding 12% of his total monthly basic pay and dearness allowance. But in this case contribution by employer is restricted to 12 per cent only.
I hope I am not making any mistake.
Thanks and regards.
Keshav Korgaonkar
From India, Mumbai
I thing you are making some conceptual mistakes in your reply.
With due respect to you madam, I draw your kind attention to Paragraph 2(f) of the EPF scheme which defines an excluded employee is 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.
Please be noted that once a person is member of PF, he is a member of PF life long in this service if the Act is applicable to his establishment.
Now, the section 6 of the Act says that the contribution which shall be paid by the employer to the Fund shall be 12 per cent of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable to each of the employees, (whether employed by him directly or by or through a contractor) and the employees' contribution shall be equal to the contribution payable by the employer in respect of him and may if any employee so desires, be an amount exceeding 12 per cent of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section:
This means member can contribute voluntarily to the provident fund an amount exceeding 12% of his total monthly basic pay and dearness allowance. But in this case contribution by employer is restricted to 12 per cent only.
I hope I am not making any mistake.
Thanks and regards.
Keshav Korgaonkar
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
PF salab limit.pdf
SALARY with out PF Deduction.xls
PF deduction on leave encashment.doc