Dear Members
I would appreciate if anyone could clarify the query.
A company is deducting PF @ 12% on full basic (Ex: Gross Salary Rs.24000, Basic Rs.12000, HRA Rs.6000, Conveyance Rs.800, special allowances Rs.5200). PF is deducted @ 12% of Rs.12000 = Rs.1440 and the same is paid by the Employer as is contribution Rs.1440. The Total Contribution for that employee is Rs.2880. Now the employees are requesting the management to reduce the maximum contribution to Rs.780 with restricted to Basic Salary of Rs.6500.
The company is willing to do the same but without changing the basic salary Rs.12000.
Now the Contribution to PF will be Rs.780+780 = 1560.
Please let us know whether the company can change to the new or it as to follow the old.
If it’s new what are rules to be followed.
If it\'s old why it\'s to be followed
Thank you very in advance
Sekar
From India, Madras
Acknowledge(0)
Amend(0)
I would appreciate if anyone could clarify the query.
A company is deducting PF @ 12% on full basic (Ex: Gross Salary Rs.24000, Basic Rs.12000, HRA Rs.6000, Conveyance Rs.800, special allowances Rs.5200). PF is deducted @ 12% of Rs.12000 = Rs.1440 and the same is paid by the Employer as is contribution Rs.1440. The Total Contribution for that employee is Rs.2880. Now the employees are requesting the management to reduce the maximum contribution to Rs.780 with restricted to Basic Salary of Rs.6500.
The company is willing to do the same but without changing the basic salary Rs.12000.
Now the Contribution to PF will be Rs.780+780 = 1560.
Please let us know whether the company can change to the new or it as to follow the old.
If it’s new what are rules to be followed.
If it\'s old why it\'s to be followed
Thank you very in advance
Sekar
From India, Madras
Acknowledge(0)Amend(0)
Dear Sekar,
You can follow the new contribution, i.e., 780+780=1560, as the employee having a basic salary of more than 6500/- always has a choice whether he wants deductions on his actual basic salary or on 6500/-.
Regards,
Pooja
From India, Hyderabad
Acknowledge(0)Amend(0)
12You can follow the new contribution, i.e., 780+780=1560, as the employee having a basic salary of more than 6500/- always has a choice whether he wants deductions on his actual basic salary or on 6500/-.
Regards,
Pooja
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Shekhar ji,
Though you are entitled to discontinue the remittance of the provident fund contributions in excess of Rs. 780, you are advised to seek consent from all affected employees. I am attaching a draft of the consent for your reference.
Additionally, it is recommended to issue a notice of change under 9A of the ID Act.
In this regard, I draw your attention to the judgment dated 05.02.2004 of the High Court of Kerala in the matter of The North Malabar Gramin Bank Officers Association & Another Vs. Reserve Bank of India & Others (Case No: OP. Nos.14011 of 2001(R),17647 of 2001, 17655 of 2001,17994 of 2001 & 13968 of 2001).
I invite other members of this forum to comment on this subject matter.
Thanks and regards,
Keshav Korgaonkar
From India, Mumbai
Acknowledge(0)Amend(0)
Though you are entitled to discontinue the remittance of the provident fund contributions in excess of Rs. 780, you are advised to seek consent from all affected employees. I am attaching a draft of the consent for your reference.
Additionally, it is recommended to issue a notice of change under 9A of the ID Act.
In this regard, I draw your attention to the judgment dated 05.02.2004 of the High Court of Kerala in the matter of The North Malabar Gramin Bank Officers Association & Another Vs. Reserve Bank of India & Others (Case No: OP. Nos.14011 of 2001(R),17647 of 2001, 17655 of 2001,17994 of 2001 & 13968 of 2001).
I invite other members of this forum to comment on this subject matter.
Thanks and regards,
Keshav Korgaonkar
From India, Mumbai
Acknowledge(0)Amend(0)
Hi,
Zuby.in is a website that provides salary information for various IT and Finance companies in India. The site also features articles about trends in salaries, job searching, and interviewing tips.
Thanks
From India, Delhi
Acknowledge(0)Amend(0)
Zuby.in is a website that provides salary information for various IT and Finance companies in India. The site also features articles about trends in salaries, job searching, and interviewing tips.
Thanks
From India, Delhi
Acknowledge(0)Amend(0)
can employee having basic more than 6500 stop the contribution towards the provident fund with consent of employer.
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
Dear mohitejitendra, Answer to your query is, No. Once a member of PF, always a member of PF. He has no option to stop contribution of PF. However, his contribution can be restricted to Rs. 780/-.
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Right Suggestion by Keshav Ji,
Employers can limit their contribution to Rs. 6500 even at a later stage. Please refer to the link posted by Shri Madhu: (https://www.citehr.com/443418-pf-contribution-employer.html).
Regards,
Suresh
From India, Bangalore
Acknowledge(0)Amend(0)
Employers can limit their contribution to Rs. 6500 even at a later stage. Please refer to the link posted by Shri Madhu: (https://www.citehr.com/443418-pf-contribution-employer.html).
Regards,
Suresh
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Sekar,
Yes, it can be done, and Mr. Kargaokar ji and Pooja rightly advised you. The subject matter has already been discussed earlier on CiteHR.
Since your company is already giving the benefit of PF on the full basic salary, it has become a service condition for the purposes of the ID Act. If your company wants to change the policy, you have to apply for approval from the Labor Authorities in respect of the employees covered under the ID Act. For the other employees, their consent will suffice. However, before changing the PF deduction pattern, you have to inform the PF commissioner and obtain his formal approval. You can do it legally as per various judgments cited by Mr. Kargaokar. But keep in mind, there should be only one policy in this respect, applicable to all employees. You cannot have two sets of policies, one for old and the other for new arrivals.
Pkjain
From India, Delhi
Acknowledge(0)Amend(0)
Yes, it can be done, and Mr. Kargaokar ji and Pooja rightly advised you. The subject matter has already been discussed earlier on CiteHR.
Since your company is already giving the benefit of PF on the full basic salary, it has become a service condition for the purposes of the ID Act. If your company wants to change the policy, you have to apply for approval from the Labor Authorities in respect of the employees covered under the ID Act. For the other employees, their consent will suffice. However, before changing the PF deduction pattern, you have to inform the PF commissioner and obtain his formal approval. You can do it legally as per various judgments cited by Mr. Kargaokar. But keep in mind, there should be only one policy in this respect, applicable to all employees. You cannot have two sets of policies, one for old and the other for new arrivals.
Pkjain
From India, Delhi
Acknowledge(0)Amend(0)
Dear Jain ji,
I agree with you that there should be only one policy regarding PF deduction. In the past, I have observed uniformity in benefits and facilities provided to employees. Lack of uniformity and disparities in benefits among employees were considered discriminatory. Nowadays, we see more flexible components in benefits and facilities. In the CTC structure, discrimination should not be a factor in my opinion.
Ultimately, how one presents oneself plays a crucial role. Additionally, the current generation of law enforcement authorities seems to have little interest in enforcing the law; their focus appears to be elsewhere.
From India, Mumbai
Acknowledge(0)Amend(0)
I agree with you that there should be only one policy regarding PF deduction. In the past, I have observed uniformity in benefits and facilities provided to employees. Lack of uniformity and disparities in benefits among employees were considered discriminatory. Nowadays, we see more flexible components in benefits and facilities. In the CTC structure, discrimination should not be a factor in my opinion.
Ultimately, how one presents oneself plays a crucial role. Additionally, the current generation of law enforcement authorities seems to have little interest in enforcing the law; their focus appears to be elsewhere.
From India, Mumbai
Acknowledge(0)Amend(0)
Hi all,
I have one query. Recently, I have joined a company, and at the time of joining, they didn't inform me about PF. After two months, they informed me that there is a PF deduction from my salary, and the amount is $1,600. Is this amount illegal? Because as far as I know, the PF amount should be $780 or 12% of the employee's basic salary. Kindly provide me with the necessary information.
Thank you.
From India, Noida
Acknowledge(0)Amend(0)
I have one query. Recently, I have joined a company, and at the time of joining, they didn't inform me about PF. After two months, they informed me that there is a PF deduction from my salary, and the amount is $1,600. Is this amount illegal? Because as far as I know, the PF amount should be $780 or 12% of the employee's basic salary. Kindly provide me with the necessary information.
Thank you.
From India, Noida
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Pf name & dob change letter format.doc
PF Circular - Change in Name.pdf