Hi! I have one query - if an employee has a total salary of 18000 and his basic is supposed to be 8000, is he eligible to opt-out from PF?
Is PF considered on the total salary or on the basic? For example, if the total is above 15K, can he opt-out from PF? However, if the basic is only 8K, should PF still be applicable? I am confused about this part. Kindly suggest a solution.
From India, Indore
Acknowledge(0)
Amend(0)
Is PF considered on the total salary or on the basic? For example, if the total is above 15K, can he opt-out from PF? However, if the basic is only 8K, should PF still be applicable? I am confused about this part. Kindly suggest a solution.
From India, Indore
Acknowledge(0)Amend(0)
As per Section 2 of the EPF & MP (Amendment) proposed Bill 2019, PF is to be computed from Basic, DA, and Retaining Allowance and should not be computed from Bonus, Conveyance, HRA, Overtime Allowance, and Gratuity. For further clarification, please refer to the bill enclosed herewith.
M. Palani
Acknowledge(0)Amend(0)
3M. Palani
Acknowledge(0)Amend(0)
In the proviso of the said amendment, it has been mentioned that other allowances, if more than 50% of the wage (basic wage), will be added back to the wage. The concept is 2/3rd wage and 1/3rd other allowances of the monthly gross. For example, on a monthly gross of 10,000/-, it is better to have a wage of 70%, i.e., 7000/-, and other allowances of 30%, i.e., 3000/-.
Let's suppose it is reversed, and the wage is 3000/-, and other allowances are 7000/-, then the other allowance will be 50% of the wage, i.e., 1500/-, and the wage will be 3000/- + 5500/- (7000/- - 1500/-) = 8500/-.
S K Bandyopadhyay (Howrah, WB)
From India, New Delhi
Acknowledge(0)Amend(0)
Let's suppose it is reversed, and the wage is 3000/-, and other allowances are 7000/-, then the other allowance will be 50% of the wage, i.e., 1500/-, and the wage will be 3000/- + 5500/- (7000/- - 1500/-) = 8500/-.
S K Bandyopadhyay (Howrah, WB)
From India, New Delhi
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.