Dear Friends,
Is special allowance (conveyance, performance incentive) a part of the basic wage for calculating PF salary? For example, a person with Basic wage: 14000, HRA: 3000, conveyance: 2500, performance incentives: 1000. So, his EPF can be 14000 x 12% = 1680 or 17500 x 12% = 1800.
Please advise us.
Regards,
ARUN
Location: Chennai, India
From India, Chennai
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Is special allowance (conveyance, performance incentive) a part of the basic wage for calculating PF salary? For example, a person with Basic wage: 14000, HRA: 3000, conveyance: 2500, performance incentives: 1000. So, his EPF can be 14000 x 12% = 1680 or 17500 x 12% = 1800.
Please advise us.
Regards,
ARUN
Location: Chennai, India
From India, Chennai
Acknowledge(0)Amend(0)
In India, when calculating the Provident Fund (PF) contribution, the components of basic wage considered include basic salary and dearness allowance. As per the recent Supreme Court judgment in the case of "The Regional Provident Fund Commissioner (II) West Bengal vs Vivekananda Vidyamandir & Others," special allowances such as conveyance allowance, performance incentive, etc., are now considered part of basic wages for PF calculation purposes.
Here's how you can calculate the EPF contribution in the scenario provided:
- Basic wage: 14000
- HRA: 3000
- Conveyance: 2500
- Performance incentives: 1000
Based on the updated rules, the EPF contribution would be calculated as follows:
Total Basic Wage = Basic wage + Special allowances (conveyance + performance incentives)
Total Basic Wage = 14000 + 2500 + 1000 = 17500
EPF contribution = Total Basic Wage x 12%
EPF contribution = 17500 x 12% = 2100
Therefore, the EPF contribution in this case would be 2100. It is essential to ensure compliance with the latest regulations and rulings to avoid any discrepancies in PF calculations.
From India, Gurugram
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35Here's how you can calculate the EPF contribution in the scenario provided:
- Basic wage: 14000
- HRA: 3000
- Conveyance: 2500
- Performance incentives: 1000
Based on the updated rules, the EPF contribution would be calculated as follows:
Total Basic Wage = Basic wage + Special allowances (conveyance + performance incentives)
Total Basic Wage = 14000 + 2500 + 1000 = 17500
EPF contribution = Total Basic Wage x 12%
EPF contribution = 17500 x 12% = 2100
Therefore, the EPF contribution in this case would be 2100. It is essential to ensure compliance with the latest regulations and rulings to avoid any discrepancies in PF calculations.
From India, Gurugram
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Supreme court judgment on bifurcation of PF.pdf