Dear All,
Let's put it in the following manner :-
1. Company having less than 20 employees are not coming under the perview of PF statute hence he is not duty bound to cover his employees under PF. If the employees insist for PF coverage as a good gesture the employer may agree but the decision is entirely employer's own.
2. Company having more than 20 employees are are bound to cover employees under PF. There my be employees with basic + DA below Rs 6500 and employees with basic + DA more than Rs 6500/- . While PF coverage for the employees with Rs 6500/- is a must the other category with over Rs 6500/- is optional.
3. If an employee was covered under PF with his previous employer, now joining a company with a basic + DA over Rs 6500/- will be covered under the PF statute.
4. If the employee strength of an organisation comes down below 20 say from 60 to 15even then the employer will have to contribute to PF for the remaining employees.
The Regional PF Commissioner may take legal action againast an employer for non compliance & violation of Act.
From India, Calcutta
6Let's put it in the following manner :-
1. Company having less than 20 employees are not coming under the perview of PF statute hence he is not duty bound to cover his employees under PF. If the employees insist for PF coverage as a good gesture the employer may agree but the decision is entirely employer's own.
2. Company having more than 20 employees are are bound to cover employees under PF. There my be employees with basic + DA below Rs 6500 and employees with basic + DA more than Rs 6500/- . While PF coverage for the employees with Rs 6500/- is a must the other category with over Rs 6500/- is optional.
3. If an employee was covered under PF with his previous employer, now joining a company with a basic + DA over Rs 6500/- will be covered under the PF statute.
4. If the employee strength of an organisation comes down below 20 say from 60 to 15even then the employer will have to contribute to PF for the remaining employees.
The Regional PF Commissioner may take legal action againast an employer for non compliance & violation of Act.
From India, Calcutta
Dear Jhuma,
PF gets an optional choice both for employee and employer if basic is more than Rs. 6500/-
In this case its on employee or employer mutual consent that either to deduct it or not. Their is no complusion of deduction Pf on more than 6500/-
From India, New Delhi
PF gets an optional choice both for employee and employer if basic is more than Rs. 6500/-
In this case its on employee or employer mutual consent that either to deduct it or not. Their is no complusion of deduction Pf on more than 6500/-
From India, New Delhi
Hi
As per Provident Fund MP Act, 1952 Provident Fund deduction is compulsory from the day one.
You can exempt the employee if his/her salary/wages more than Rs.6500/- (Basic+DA or Basic) at the time of joining - i.e. exemptem employee
In case if the employee is willing to join in Provident Fund even if his/her salary more than Rs.6500/- pm the provident fund contributions can be restricted to Rs.6500/- only
Or otherwise if both employee and employer are willing to contribute Pf contributions for the employee salary / wage is more than Rs.6500/- at the time of joining pf deductions can be made with written consent.
But employer cannot have right to stop PF deductions from out of the salary/wages of employees and at the same time employee has no right to refuse such deductions from their salary/wages.
Hope the above is suffice
Tks & Regards
From India, Hyderabad
As per Provident Fund MP Act, 1952 Provident Fund deduction is compulsory from the day one.
You can exempt the employee if his/her salary/wages more than Rs.6500/- (Basic+DA or Basic) at the time of joining - i.e. exemptem employee
In case if the employee is willing to join in Provident Fund even if his/her salary more than Rs.6500/- pm the provident fund contributions can be restricted to Rs.6500/- only
Or otherwise if both employee and employer are willing to contribute Pf contributions for the employee salary / wage is more than Rs.6500/- at the time of joining pf deductions can be made with written consent.
But employer cannot have right to stop PF deductions from out of the salary/wages of employees and at the same time employee has no right to refuse such deductions from their salary/wages.
Hope the above is suffice
Tks & Regards
From India, Hyderabad
I just would like to point out that some members use the cite to shirk doing minimum work on their own.look at this question* Is paying PF optional?"Young members should read the basics & ask clarifications where intricate interpretations are involved or there is a lack of clarity.
A casual approach could put you in difficuliy since you are blindly depending on opinions of individuals. The basic law is not opinion & it has to be read.
This is a valuable & useful cite. But use it with discretion for best benefits. " I would like to start an ADVt firm. Can anyone give suggestions?" like queries would not be in the spirit of a cite of serious HR professionals.
Warm Regards
Rationalraj
From India, Bellary
A casual approach could put you in difficuliy since you are blindly depending on opinions of individuals. The basic law is not opinion & it has to be read.
This is a valuable & useful cite. But use it with discretion for best benefits. " I would like to start an ADVt firm. Can anyone give suggestions?" like queries would not be in the spirit of a cite of serious HR professionals.
Warm Regards
Rationalraj
From India, Bellary
Hello All,
I have a question:
As per the PF Act, deduction of PF beyond Rs.6500/- becomes optional for the Employee and Employer.
If an Employee and Employer decides not to exercise the option of deduction of PF beyond Rs 6500/- ( that is limiting the Basic to Rs.6500/-), will it in anyway effect the Gratuity calculation?
Can an employer use Rs.6500/- Basic Pay for PF purposes and use a different Basic Pay (Say Rs 25,000/- Basic Pay) for Gratuity purpose?
Thanks in advance....
From United States, Newport Beach
I have a question:
As per the PF Act, deduction of PF beyond Rs.6500/- becomes optional for the Employee and Employer.
If an Employee and Employer decides not to exercise the option of deduction of PF beyond Rs 6500/- ( that is limiting the Basic to Rs.6500/-), will it in anyway effect the Gratuity calculation?
Can an employer use Rs.6500/- Basic Pay for PF purposes and use a different Basic Pay (Say Rs 25,000/- Basic Pay) for Gratuity purpose?
Thanks in advance....
From United States, Newport Beach
Provident Fund amount is calculated from Basic Salary only. So I have stated accordingly. As per your statement PF@12 should be deducted from earned basic salary only rather than fixed basic salary.
PF is deducted @ 12 % of basic pay from employee salary. Employer also contributes same amount (12 % of basic) to PF account of an employee. The employer’s contribution is tax-free up to 12 per cent of the salary. Any contribution by the employer over and above this limit of 12 % is taxed in the year in which it accrues. So we have deduct PF amount from an employee from his Earned Gross Salary of 12% rather than Fixed Gross Salary.
Example Case Study:
If your basic salary is Rs 10,000 per month (dearness allowance does not form part of the pay) and the employer contributes Rs 1,500 per month towards RPF, 12 per cent of the basic salary, i.e. Rs 1,200 will be tax-free and the balance Rs 300 will be taxed. RPF also entitles you to rebate under Section 88. Interest up to 9.5 per cent per annum is exempt from tax and any rate higher than this is taxed.
PF @ 12% is to be deducted from the earned BASIC SALARY, not on the earned gross salary.
From India, Madras
PF is deducted @ 12 % of basic pay from employee salary. Employer also contributes same amount (12 % of basic) to PF account of an employee. The employer’s contribution is tax-free up to 12 per cent of the salary. Any contribution by the employer over and above this limit of 12 % is taxed in the year in which it accrues. So we have deduct PF amount from an employee from his Earned Gross Salary of 12% rather than Fixed Gross Salary.
Example Case Study:
If your basic salary is Rs 10,000 per month (dearness allowance does not form part of the pay) and the employer contributes Rs 1,500 per month towards RPF, 12 per cent of the basic salary, i.e. Rs 1,200 will be tax-free and the balance Rs 300 will be taxed. RPF also entitles you to rebate under Section 88. Interest up to 9.5 per cent per annum is exempt from tax and any rate higher than this is taxed.
PF @ 12% is to be deducted from the earned BASIC SALARY, not on the earned gross salary.
From India, Madras
Dear friends Anybody can give me pf calculation for making pf challan. There is one staff and basic is Rs.7750/-. Please do the needful. Sanjay
From India, Mumbai
From India, Mumbai
Does this mean that if while a person is joining an org and the org. has PF, if the employee has basic+DA more than 6500, the employer has the option of giving the PF or not?
Also, contractors should be included in PF ? like contract - office attendent, security, or tech support contract staff hired as contractors?
From India, Bangalore
Also, contractors should be included in PF ? like contract - office attendent, security, or tech support contract staff hired as contractors?
From India, Bangalore
Dear Jhuma,
It is one situation only, in which employer can decide about pf deduction of an employee and that is if at the time of joining employee's basic +da is more than 6500, provided that earlier no pf was deducting from his/her salary.
Otherwise it is not discretion of employer and not the employee, it is a statuary compliance and both parties will have to comply it.
Thx
Rajesh Sharma
From India, Delhi
It is one situation only, in which employer can decide about pf deduction of an employee and that is if at the time of joining employee's basic +da is more than 6500, provided that earlier no pf was deducting from his/her salary.
Otherwise it is not discretion of employer and not the employee, it is a statuary compliance and both parties will have to comply it.
Thx
Rajesh Sharma
From India, Delhi
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls