Dear Sirs,
I am working in an agriculture-based organization. I have a query regarding the provident fund.
My query is, is it possible for an employee to make his PF contribution on a lesser Basic+DA than his actual Basic+DA? As he was already contributing on his actual Basic+DA.
For example, his Basic+D.A= Rs 12,500/- per month. He was contributing on the above Basic+DA @ 12%. His contribution was Rs 1,500/- per month. Now after a salary revision, his Basic+DA is Rs 15,500, and the contribution to PF will be Rs 1,860/-.
Hence, his contribution to PF increased as his salary increased, but he doesn't want to contribute at a higher salary. Now he wants to contribute to his PF account based on Rs 6,500/- (as per PF law regarding the maximum (bounded) salary for the calculation of employer contribution). Can he do so? If yes, then what procedure does he have to follow?
Is there any other option to switch from EPF to PPF or any other PF scheme?
Please help.
Thanks & regards
From India, Purnea
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I am working in an agriculture-based organization. I have a query regarding the provident fund.
My query is, is it possible for an employee to make his PF contribution on a lesser Basic+DA than his actual Basic+DA? As he was already contributing on his actual Basic+DA.
For example, his Basic+D.A= Rs 12,500/- per month. He was contributing on the above Basic+DA @ 12%. His contribution was Rs 1,500/- per month. Now after a salary revision, his Basic+DA is Rs 15,500, and the contribution to PF will be Rs 1,860/-.
Hence, his contribution to PF increased as his salary increased, but he doesn't want to contribute at a higher salary. Now he wants to contribute to his PF account based on Rs 6,500/- (as per PF law regarding the maximum (bounded) salary for the calculation of employer contribution). Can he do so? If yes, then what procedure does he have to follow?
Is there any other option to switch from EPF to PPF or any other PF scheme?
Please help.
Thanks & regards
From India, Purnea
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Hi,
If you are paying over the ceiling and suddenly you cannot reduce the contribution as per the latest amendment, read section 12. If you need to contribute to VPF, then it's possible you can contribute up to 100% of your Basic in VPF.
From India, Mumbai
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429If you are paying over the ceiling and suddenly you cannot reduce the contribution as per the latest amendment, read section 12. If you need to contribute to VPF, then it's possible you can contribute up to 100% of your Basic in VPF.
From India, Mumbai
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Dear Ravi 5554, Greetings of the day!!! Can you just send me the new PF amendment, is it mandatory to take a ceiling as 15000 RS. If yes from which date it is applicable
From India, Chennai
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From India, Chennai
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Hi, Govindraj Still PF ceiling limit is 6500/-, when new notification will come i will update you....
From India, Mumbai
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From India, Mumbai
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Dear Aditya Sir,
As we know, Rs 6500 is the maximum limit for the employer and employee. If a new employee gets a higher salary than Rs 6500, he has the option to opt for a deduction based on actual basic+DA or Rs 6500/-.
My question is:
1) Is it possible for an employee to contribute based on Rs 6500/- when he has already contributed at a higher basic than Rs 6500.00 in past months? Can an employee (who gets a salary more than Rs 6500) revise his option for the deduction of PF?
2) Can he transfer/switch over his EPF to any other PF Scheme like PPF? You mentioned the Voluntary Provident Fund (VPF). Please provide some details about this.
Please help me to resolve this situation.
Thanks & regards,
Dinesh Kumar
From India, Purnea
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As we know, Rs 6500 is the maximum limit for the employer and employee. If a new employee gets a higher salary than Rs 6500, he has the option to opt for a deduction based on actual basic+DA or Rs 6500/-.
My question is:
1) Is it possible for an employee to contribute based on Rs 6500/- when he has already contributed at a higher basic than Rs 6500.00 in past months? Can an employee (who gets a salary more than Rs 6500) revise his option for the deduction of PF?
2) Can he transfer/switch over his EPF to any other PF Scheme like PPF? You mentioned the Voluntary Provident Fund (VPF). Please provide some details about this.
Please help me to resolve this situation.
Thanks & regards,
Dinesh Kumar
From India, Purnea
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Mr. Ravi,
After 1976, there have been no amendments to Section 12 of the EPF Act. I think the employee can limit the contribution to Rs 6500/- (now). The Supreme Court has allowed this for employers. So why can't it be extended to employees as well?
Varghese Mathew
09961266966
From India, Thiruvananthapuram
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After 1976, there have been no amendments to Section 12 of the EPF Act. I think the employee can limit the contribution to Rs 6500/- (now). The Supreme Court has allowed this for employers. So why can't it be extended to employees as well?
Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Hi,
Section 12 in The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
1[12. Employer not to reduce wages, etc.—No employer in relation to 2[an establishment] to which any 3[Scheme or the Insurance Scheme] applies shall, by reason only of his liability for the payment of any contribution to 4[the Fund or the Insurance Fund] or any charges under this Act or the 3[Scheme or the Insurance Scheme], reduce, whether directly or indirectly, the wages of any employee to whom the 3[Scheme or the Insurance Scheme] applies or the total quantum of benefits in the nature of old age pension, gratuity 5[, provident fund or life insurance] to which the employee is entitled under the terms of his employment, express or implied.]
From India, Mumbai
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Section 12 in The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
1[12. Employer not to reduce wages, etc.—No employer in relation to 2[an establishment] to which any 3[Scheme or the Insurance Scheme] applies shall, by reason only of his liability for the payment of any contribution to 4[the Fund or the Insurance Fund] or any charges under this Act or the 3[Scheme or the Insurance Scheme], reduce, whether directly or indirectly, the wages of any employee to whom the 3[Scheme or the Insurance Scheme] applies or the total quantum of benefits in the nature of old age pension, gratuity 5[, provident fund or life insurance] to which the employee is entitled under the terms of his employment, express or implied.]
From India, Mumbai
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Dear all,
First of all, I would like to say thanks for your quotes. However, I still have some doubts. Can an employee approach the employer for a contribution on a lesser Basic+DA? Should the employer accept the proposal of an employee who wants to restrict their Basic+DA for PF contribution up to Rs 6500/-? The employer has restricted his contribution up to Basic+DA of Rs 6500/-.
Please suggest, is it possible for the employer to accept it?
Thanks & regards
From India, Purnea
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First of all, I would like to say thanks for your quotes. However, I still have some doubts. Can an employee approach the employer for a contribution on a lesser Basic+DA? Should the employer accept the proposal of an employee who wants to restrict their Basic+DA for PF contribution up to Rs 6500/-? The employer has restricted his contribution up to Basic+DA of Rs 6500/-.
Please suggest, is it possible for the employer to accept it?
Thanks & regards
From India, Purnea
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Hi, Employer can't restrict employees' contributions, but he can restrict his own contribution to 6500/-. For employees, reducing their contribution is a better concern for the office. I hope this clears things up.
From India, Mumbai
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From India, Mumbai
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Dear Dinesh Kumar Ji,
I would comment on the second part of your query. PPF is not a substitute for EPF. EPF can be maintained either by the EPFO or by a Trust created with the sanction by EPFO. One can opt out of EPF provided one's wages are above Rs. 6,500 per month. He can then save in PPF. However, he will not be able to avail of the pension and deposit-linked insurance scheme if he prefers PPF to EPF. EPF gives more interest than PPF. The employee also loses the employer's 12% contribution, which is a major loss of opting out of EPF. EPF is a social welfare scheme, so it is in the interest of employees to become a member of EPF. Voluntary EPF is contributing over and above the 12% statutory subscription. An employee can contribute more than 12% of his wages and avail of benefits of tax rebate under 80C.
As we know, Rs. 6500 is the maximum limit for the employer and employee. If a new employee gets a higher salary than Rs. 6500, he has the option to opt for deduction on actual basic+DA or Rs. 6500/-. My question was:
1) Is it possible for an employee to contribute on the basis of Rs. 6500/- when he already contributed at a higher basic than Rs. 6500.00 in past months? Can an employee (who gets a salary more than 6500) revise his option for the deduction of PF?
2) Can he transfer/switch over his EPF to any other PF Scheme like PPF? You wrote about Voluntary Provident Fund (VPF). Please give some details about this. Please help me to come out of this situation.
Thanks & regards,
Dinesh Kumar
From India, Pune
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I would comment on the second part of your query. PPF is not a substitute for EPF. EPF can be maintained either by the EPFO or by a Trust created with the sanction by EPFO. One can opt out of EPF provided one's wages are above Rs. 6,500 per month. He can then save in PPF. However, he will not be able to avail of the pension and deposit-linked insurance scheme if he prefers PPF to EPF. EPF gives more interest than PPF. The employee also loses the employer's 12% contribution, which is a major loss of opting out of EPF. EPF is a social welfare scheme, so it is in the interest of employees to become a member of EPF. Voluntary EPF is contributing over and above the 12% statutory subscription. An employee can contribute more than 12% of his wages and avail of benefits of tax rebate under 80C.
As we know, Rs. 6500 is the maximum limit for the employer and employee. If a new employee gets a higher salary than Rs. 6500, he has the option to opt for deduction on actual basic+DA or Rs. 6500/-. My question was:
1) Is it possible for an employee to contribute on the basis of Rs. 6500/- when he already contributed at a higher basic than Rs. 6500.00 in past months? Can an employee (who gets a salary more than 6500) revise his option for the deduction of PF?
2) Can he transfer/switch over his EPF to any other PF Scheme like PPF? You wrote about Voluntary Provident Fund (VPF). Please give some details about this. Please help me to come out of this situation.
Thanks & regards,
Dinesh Kumar
From India, Pune
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Dear Ravi,
Thank you for your reply. There have been some changes in income tax as per the budget; the income tax ceiling has been changed to 250,000, and the investment limit has been increased to 150,000. When will these changes take effect? Is it applicable from April 2014 to March 2015?
Thank you.
From India, Chennai
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Thank you for your reply. There have been some changes in income tax as per the budget; the income tax ceiling has been changed to 250,000, and the investment limit has been increased to 150,000. When will these changes take effect? Is it applicable from April 2014 to March 2015?
Thank you.
From India, Chennai
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