Dear All,
Greetings of the day!
I want to know if we deduct Provident Fund of an employee above the range of 6500/-. For example, on 6500, the employee's contribution is 12%, which amounts to 780/-. If we are deducting 810/- for the employee PF, can I decrease his contribution, or will it increase every year from 810/- PM? Please guide me.
Thanks & Regards,
Jagdish
From India
Acknowledge(0)
Amend(0)
7Greetings of the day!
I want to know if we deduct Provident Fund of an employee above the range of 6500/-. For example, on 6500, the employee's contribution is 12%, which amounts to 780/-. If we are deducting 810/- for the employee PF, can I decrease his contribution, or will it increase every year from 810/- PM? Please guide me.
Thanks & Regards,
Jagdish
From India
Acknowledge(0)Amend(0)
Dear Jagdish,
PF contribution can't be reduced at any point in time. Secondly, if an employee wishes to increase his contribution by more than 12%, you may allow them to do so. However, in that case, the employer is not bound to deduct a higher percentage (more than 12%); they are allowed to contribute at least 12%.
Regards,
Tushar Swar
From India, Mumbai
Acknowledge(0)Amend(0)
PF contribution can't be reduced at any point in time. Secondly, if an employee wishes to increase his contribution by more than 12%, you may allow them to do so. However, in that case, the employer is not bound to deduct a higher percentage (more than 12%); they are allowed to contribute at least 12%.
Regards,
Tushar Swar
From India, Mumbai
Acknowledge(0)Amend(0)
Mr. Tushar Option is open if we get declaration from the individual to do so. R.KS.INGH
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Mr. Tushar,
Thank you for your kind reply. I would like to inquire about a matter regarding minimum wages in the hotel industry. Previously, when the minimum wages were increased, the Provident Fund (PF) contribution was 12%, amounting to 810/-. Now, the minimum wages are set at 6500/-. Initially, for a month or two, we continued to contribute 810/- per month for some of our employees. Recently, our consultant has advised us that regardless of any revisions in minimum wages, it is mandatory to increase the PF contribution for these employees from 810/- after a year. Could you please confirm if this is correct or incorrect? Your guidance on this matter would be greatly appreciated.
Thanks & Regards,
Jagdish
From India
Acknowledge(0)Amend(0)
Thank you for your kind reply. I would like to inquire about a matter regarding minimum wages in the hotel industry. Previously, when the minimum wages were increased, the Provident Fund (PF) contribution was 12%, amounting to 810/-. Now, the minimum wages are set at 6500/-. Initially, for a month or two, we continued to contribute 810/- per month for some of our employees. Recently, our consultant has advised us that regardless of any revisions in minimum wages, it is mandatory to increase the PF contribution for these employees from 810/- after a year. Could you please confirm if this is correct or incorrect? Your guidance on this matter would be greatly appreciated.
Thanks & Regards,
Jagdish
From India
Acknowledge(0)Amend(0)
Dear Jagdish,
Your consultant is absolutely right. You may continue to deduct on ₹6500 until the new amendment is in effect, as the PF authority is increasing the PF ceiling from ₹6500 to ₹10,000.
Regards,
Tushar Swar
From India, Mumbai
Acknowledge(0)Amend(0)
Your consultant is absolutely right. You may continue to deduct on ₹6500 until the new amendment is in effect, as the PF authority is increasing the PF ceiling from ₹6500 to ₹10,000.
Regards,
Tushar Swar
From India, Mumbai
Acknowledge(0)Amend(0)
Please go through the following judgment to know more details about the PF contribution in the case of Minimum wages.
Regards,
Agdesai
MANU/SC/0446/1999
Equivalent Citation: AIR 1999 SC 2459, JT 1999 (5) SC 320, (1999) IILLJ 705 SC, 1999 (4) SCALE 451, (1999) 6 SCC 567, [1999] Supp 1 SCR 22, 2000 (1) SLJ 273 (SC)
IN THE SUPREME COURT OF INDIA
C.A. No. 4259 of 1999
Decided On: 04.08.1999
Appellants: Airfreight Ltd.
Vs.
Respondent: State of Karnataka & Ors.
From India, Mumbai
Acknowledge(0)Amend(0)
Regards,
Agdesai
MANU/SC/0446/1999
Equivalent Citation: AIR 1999 SC 2459, JT 1999 (5) SC 320, (1999) IILLJ 705 SC, 1999 (4) SCALE 451, (1999) 6 SCC 567, [1999] Supp 1 SCR 22, 2000 (1) SLJ 273 (SC)
IN THE SUPREME COURT OF INDIA
C.A. No. 4259 of 1999
Decided On: 04.08.1999
Appellants: Airfreight Ltd.
Vs.
Respondent: State of Karnataka & Ors.
From India, Mumbai
Acknowledge(0)Amend(0)
Mr. Jagadish,
The deduction or contribution to the Provident Fund is statutory. The existing salary limit, which is fixed at Rs. 6,500/-, requires a contribution of 12% from the employee's side and an equivalent amount from the employer. Additional contributions above 12% by employees are permitted, but the employer's contribution is limited. In any case, you cannot deduct a lesser amount. The deduction at the existing rate should continue until new amendments come into force.
Adoni Suguresh
Sr. Executive (Pers, Admin & Ind. Rels) Rtd
Labour Law Consultant
From India, Bidar
Acknowledge(0)Amend(0)
The deduction or contribution to the Provident Fund is statutory. The existing salary limit, which is fixed at Rs. 6,500/-, requires a contribution of 12% from the employee's side and an equivalent amount from the employer. Additional contributions above 12% by employees are permitted, but the employer's contribution is limited. In any case, you cannot deduct a lesser amount. The deduction at the existing rate should continue until new amendments come into force.
Adoni Suguresh
Sr. Executive (Pers, Admin & Ind. Rels) Rtd
Labour Law Consultant
From India, Bidar
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Splitting of Minimum Wages for the purpose of PF contribution not permissible.doc x
EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf