Dear Members, I wish to seek clarification on whether a person who is part of the management body and also serves as the CEO of the same company is eligible for PF deduction.
Is there any legal provision under the EPF Act that exempts such individuals from PF contributions?
I would greatly appreciate your guidance on this matter.
Thank you,
Aditi Suryawanshi
From India, Mumbai
Acknowledge(0)
Amend(0)
Is there any legal provision under the EPF Act that exempts such individuals from PF contributions?
I would greatly appreciate your guidance on this matter.
Thank you,
Aditi Suryawanshi
From India, Mumbai
Acknowledge(0)Amend(0)
As per the Employees' Provident Fund (EPF) Act of India, all employees - irrespective of their designation or role within the organization - are eligible for Provident Fund (PF) deductions, as long as the company has more than 20 employees.
This includes individuals serving on the management body or those holding the position of CEO. The key factor is that they are salaried employees of the organization. Therefore, unless the CEO is a part-owner or a partner and does not draw a salary, he/she will be eligible for PF deductions.
However, there is an exemption clause under Paragraph 27A of the EPF Scheme, according to which any employee whose pay exceeds Rs 15,000 per month at the time of joining, is given an option to opt out of EPF.
But, once an employee becomes a member of EPF, they cannot opt out of it until they retire or resign and remain unemployed for a continuous period of 2 months.
It's important to consult with a labor law expert or legal advisor to understand the detailed implications and legal requirements related to the EPF Act. They can guide you with the most accurate information tailored to your specific situation.
From India, Gurugram
Acknowledge(0)Amend(0)
26This includes individuals serving on the management body or those holding the position of CEO. The key factor is that they are salaried employees of the organization. Therefore, unless the CEO is a part-owner or a partner and does not draw a salary, he/she will be eligible for PF deductions.
However, there is an exemption clause under Paragraph 27A of the EPF Scheme, according to which any employee whose pay exceeds Rs 15,000 per month at the time of joining, is given an option to opt out of EPF.
But, once an employee becomes a member of EPF, they cannot opt out of it until they retire or resign and remain unemployed for a continuous period of 2 months.
It's important to consult with a labor law expert or legal advisor to understand the detailed implications and legal requirements related to the EPF Act. They can guide you with the most accurate information tailored to your specific situation.
From India, Gurugram
Acknowledge(0)Amend(0)
Hi Aditi
If he is an employee, he is under PF and his designation does not matter. It is for employee not worker.
The exemption available is under the following condition :
- His starting salary with you is above ₹ 15,000 per month
- He does not have any existing PF account at all (never had or has withdrawn all the money from it and closed)
- He fills the form and applies to the company for the exemption.
If you can comply with ALL of the above, then he can be out of PF deductions. Else, you need to deduct and pay.
From India, Mumbai
Acknowledge(0)Amend(0)
If he is an employee, he is under PF and his designation does not matter. It is for employee not worker.
The exemption available is under the following condition :
- His starting salary with you is above ₹ 15,000 per month
- He does not have any existing PF account at all (never had or has withdrawn all the money from it and closed)
- He fills the form and applies to the company for the exemption.
If you can comply with ALL of the above, then he can be out of PF deductions. Else, you need to deduct and pay.
From India, Mumbai
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Register and Log In.
Provident fund.zip
PROVIDENT FUND.rar
PROVIDENT FUND.doc
CiteHR.AI
(Amendment impartial review)-Great job providing information on PF exemptions! Just a minor addition - the ₹15,000 limit pertains to universal account number (UAN) generation, not PF exemption.(reality may align the HUMAN perspective - unverified.)