My basic is Rs. 12500 and I am getting the benefit of PF Deduction @ 12% on that. Can the company deduct my PF on Rs. 6500/- from Now?
From India
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From India
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No. Its not possible. Because it shows that a company has decreased the Basic just to avoid the liability of paying more PF contribution. Amit Goyal
From India, Delhi
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10From India, Delhi
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Dear Friend,
As Amit has rightly said, it is not possible now. Once the deduction is booked, it cannot be decreased. However, when you join a new organization, at that time, one can have the deduction restricted to a maximum of Rs. 6500/- of the basic salary only.
Regards,
Ashok
From India, Mumbai
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As Amit has rightly said, it is not possible now. Once the deduction is booked, it cannot be decreased. However, when you join a new organization, at that time, one can have the deduction restricted to a maximum of Rs. 6500/- of the basic salary only.
Regards,
Ashok
From India, Mumbai
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Dear Mr. Sanjai ji,
Here is a clarification of your doubt.
Clarification about Contribution
After revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per month, the government will continue to contribute 1.16% up to the actual wage of maximum Rs.6500 per month towards Employees’ Pension Scheme. The employer’s share in the Pension Scheme will be Rs.541 w.e.f. 1.6.2001.
Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid up to a maximum limit of Rs.6500.
The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.
Notes:
The above clarification is given by taking wages up to a maximum of Rs.6500 towards wage (basic+DA).
Since an excluded employee i.e. drawing wages more than Rs.6500 can also become member of the Fund and the Schemes on joint request and if, for instance, such an employee is getting Rs.10,000 per month, his share towards provident fund contribution will be Rs.1200 e.g. 12% and employer’s share towards provident fund contribution will be Rs.659 and Rs.541 towards Employees’ Pension Fund.
Regards,
:roll:
PBS KUMAR
From India, Kakinada
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Here is a clarification of your doubt.
Clarification about Contribution
After revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per month, the government will continue to contribute 1.16% up to the actual wage of maximum Rs.6500 per month towards Employees’ Pension Scheme. The employer’s share in the Pension Scheme will be Rs.541 w.e.f. 1.6.2001.
Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid up to a maximum limit of Rs.6500.
The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.
Notes:
The above clarification is given by taking wages up to a maximum of Rs.6500 towards wage (basic+DA).
Since an excluded employee i.e. drawing wages more than Rs.6500 can also become member of the Fund and the Schemes on joint request and if, for instance, such an employee is getting Rs.10,000 per month, his share towards provident fund contribution will be Rs.1200 e.g. 12% and employer’s share towards provident fund contribution will be Rs.659 and Rs.541 towards Employees’ Pension Fund.
Regards,
:roll:
PBS KUMAR
From India, Kakinada
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Dear Sanjoy,
You know how much you save in a year because of PF contribution on the basic pay of Rs. 12500. You save Rs. 39060 in a year (Rs. 1500+1500 in a month) * 12 * 8.5% of interest, and this amount is totally tax-free, even beyond the limit of Rs. 100000 which you aim to save annually from Income Tax.
If they set your basic at Rs. 6500, the calculation will be Rs. 780 + 780 * 12 * 8.5% = Rs. 20311. Out of this, the remaining six thousand from your basic will now become taxable (as it will be added to any other allowances in your CTC).
To me, having a PF account means I buy one Dairy Milk and get another for free.. lol
Warm regards,
Umesh Chaudhary
umesh.chaudhary@ril.com
From India, Delhi
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You know how much you save in a year because of PF contribution on the basic pay of Rs. 12500. You save Rs. 39060 in a year (Rs. 1500+1500 in a month) * 12 * 8.5% of interest, and this amount is totally tax-free, even beyond the limit of Rs. 100000 which you aim to save annually from Income Tax.
If they set your basic at Rs. 6500, the calculation will be Rs. 780 + 780 * 12 * 8.5% = Rs. 20311. Out of this, the remaining six thousand from your basic will now become taxable (as it will be added to any other allowances in your CTC).
To me, having a PF account means I buy one Dairy Milk and get another for free.. lol
Warm regards,
Umesh Chaudhary
umesh.chaudhary@ril.com
From India, Delhi
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf