I want to know is there anything like "Minimum Limit" on which PF is not cut? Also, ESI is cut on basic or gross salary?
From India, Chandigarh
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Hi Axita There is no any minimum limit for ESI & PF. There is only Max Ceiling limit for both. PF is deducted on basic Sal & ESI is on Gross
From India, Bangalore
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Hi Rajaramesh,

ESI:
For ESI, there is just a maximum limit of Gross Salary Rs 15,000/-. If any employee's gross salary exceeds Rs 15,000, then he/she is not entitled to ESI contribution. If the gross salary is less than Rs 15,000, then the employee has to contribute 1.75% of the gross salary, and the employer (ER) has to contribute 4.75% of the gross salary.

EPF:
For EPF, only Basic & DA are considered, not gross pay. If an employee's Basic + DA is above Rs 6,500, then he/she is exempted from PF based on certain criteria. If Basic + DA is less than Rs 6,500, then both the employee (EE) and employer (ER) have to contribute 12% on Basic + DA. Additionally, as an admin charge, the ER has to contribute 1.61% on Basic + DA.

:)

From India, Bangalore
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Dear Mr. Jeevarathnam,

Thank you so much for sharing the information. However, I couldn't fully comprehend the statement, "If an Employee's Basic+DA is Above 6500/-, then He/She is exempted from PF based on certain criteria." What I understand is that if someone's Basic+DA exceeds 6500/-, their PF is not deducted if the employee is willing. Is this correct? Could you please elaborate a bit more on this?

Thanks, Axita

From India, Chandigarh
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Hi, Axita,

The criteria are:

1) If Basic+DA is below 6500/-, PF is mandatory.
2) If Basic+DA is above 6500/- due to an increment or promotion, PF is mandatory. In this case, the contribution shall be limited to 780/-, which is 12% of 6500/-, or shall be contributed at 12% of the full basic.
3) If Basic+DA is above 6500/- due to a change of job, and in the earlier company, he/she had PF benefits, PF is mandatory. In this case, the contribution shall be limited to 780/-, which is 12% of 6500/-, or shall be contributed at 12% of the full basic.

In the rest of the cases, PF is not mandatory. :)

From India, Bangalore
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Ok! So, in all, PF is legally must be cut for all the employees. Also, 780 is the maximum amount that's contributed by employers, but certainly for employees, it can vary as per their will to contribute to the PF.

Thank you so much!!

From India, Chandigarh
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One last query please! Is ESI applicable to trainees as well? Also, does the maximum salary for which ESI is deducted vary from state to state, or is it $15,000 for all states? Who decides this limit? Is it mandatory for everyone, or can employees choose whether to have ESI deducted or not?
From India, Chandigarh
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Both ESI and PF are applicable even for trainees except Apprentices. Both ESI and PF are central Acts. They are common throughout India. The limits are decided by the Ministry of Labour and respective boards.
From India, Bangalore
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Hi Axita Mehta,

If P.F. is to be deducted for all employees, then who is an excluded employee under Para 2(f) of the P.F. Scheme 1952? And when will he figure?

Regarding your other query on ESI, trainees or apprentices appointed under the Apprentices Act 1961 are outside the purview of the ESI Act. So far as the wage limit is concerned, kindly refer to Sec. 2(9) read with Rule 50 of the ESI Act and Rules, which is self-evident.

B. Saikumar
HR & Labour Law Advisor
Mumbai

From India, Mumbai
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Pls clarify for PF, previous year we come to know that for PF not only Basic+Da special allowance also included to it. rgds Shenba
From India, Madras
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PF is not payable when the employee has joined the company on a salary above Rs. 6500 and did not have an active PF account when he joined. More correctly, where he did not have PF in his previous company and has not closed it when he joined a new company.
From India, Mumbai
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Dear members,

I am not sure, but I read in an article that people who are earning less than 1500 or something in that range are exempted from ESI. I am not certain about this. If there is any mistake, kindly forgive me.

D. Balavinayagam

From India, Madras
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Hi Swasthik! Are you saying that employees drawing more than Rs. 6500/- (gross or basic, couldn't make out) are not liable for any PF deductions? Also, if any employee has a PF account earlier and changes the company, could you please tell me what needs to be done to use the same PF account? If somebody opens a new PF account, what would happen to the old account? I read somewhere that it remains active only.
From India, Chandigarh
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Hello Mr. Saisevan, please correct me if I am wrong.

As per the ESI Act, the minimum wages are Rs. 50, under which the employees do not need to contribute for ESI, and all the payment is done by the employer. Trainees and apprentices are not liable for any deductions for ESI and EPF.

"If P.F. is to be deducted for all employees, then who is an excluded employee under Para 2(f) of the P.F. Scheme 1952, and when will they figure?" Can you please shed some light on the same? There are employees who are not liable for deduction. What are the criteria for the same? I was unable to find when the employee/employer would figure.

Would be thankful for your time and efforts!

Thanks, Axita

From India, Chandigarh
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6500 basic

Employee joining a company with a salary above 6500 does not need to subscribe to the PF scheme. He has to fill up Form A, and PF will not be deducted from his salary. Nor will PF contribution be applicable from the employer.

Form A has a declaration that the employee does not have any existing PF account, which means it can only happen with someone who has not worked earlier in a company where PF was being deducted, or if he has withdrawn the PF from that account prior to joining the new company.

If you have an existing PF account from your old company, you are required to have the same transferred to your new PF account.

From India, Mumbai
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Axita,

An employee is exempted from paying the employee's share of ESI contribution if their daily average wage is up to Rs. 70 (to be verified to confirm if this limit has been increased). This should not be considered as a minimum wage limit for coverage. Only trainees and apprentices appointed under the Apprentices Act are outside the purview of the ESI Act, but not all. Regarding the PF Act, trainees and apprentices appointed under the Apprentices Act or under Standing Orders are exempt from the Act.

Regarding your PF inquiry, I believe the response provided by Swastika Banerjee should clarify your doubts.

B. Saikumar HR & Labour Law Advisor Mumbai

From India, Mumbai
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The rates are revised from time to time. Currently, the employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a daily average wage upto Rs.100/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.
Plz visite ////////////
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From India, Hyderabad
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Nobody is focusing on the question which is what is the minimum limit of EPF ? Hi Axita, As per my knowledge EPF should be deducted at minimum level on Minimum wages, For this we can take Basic+DA.
From India, Chandigarh
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Mr. Jeevarathnam P,

Please, can you tell me if my gross salary is 20,000/- and after deducting professional tax of Rs. 200/-, I am receiving 19,800/- in hand?

My employer has started to deduct TDS from the month of April, an amount of approximately Rs. 265/-. I have submitted a tax declaration form to my employer stating an amount of Rs. 105,000/-.

Could you please explain in detail which calculation method he is using? Kindly provide the calculations to my email address.

Regards,
Machhindra Tuwar
Email: machhindratuwar@gmail.com

From India, Mumbai
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Hi Machhindra,

For the gross amount of Rs. 20,000, if there are breakdowns like HRA and other allowances, then there is no need for TDS. Even for Rs. 27,000 a month, TDS will not be applicable if there is a proper salary structure.

How can I determine if he is using the correct tax calculation? I believe he might be considering the entire pay as taxable income without any allowances.

From India, Bangalore
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Hi Group,

I started my career in 2000, and this is the 5th organization that I'm working for today. I would like to transfer my PF account into my present organization. Two years ago, in my previous organization, I sent Form 13 to the EPF office. Only one transfer went through, but two are still pending. I need guidance on the following, please:

- How can I check the balance of my PF account in the previous organization?
- Should I resend Form 13 for the transfer?
- What steps should I take to continue the pension scheme? Do I need to submit a separate form for the pension transfer?

Thank you.

From India, Pune
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Hi JEEVA, Your right, let me know if the salary of one person is 50,000 and his basic is 60% from Monthly CTC,then what is the amount to be recovered from the employee? Regards S.R.B
From India, Madras
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Dear Seniors,

Please clarify if any person who is deducting PF in his previous organization, and there his basic + VDA is Rs. 6752 at the time of leaving. After that, he joined a new organization where his basic is Rs. 7942. Now, the current employer says your basic is above 6500 so we did not deduct your PF, or you should give both the contributions.

Kindly suggest if any person is deducting his PF for the last 2.5 years continuously and suddenly, after this change, this issue arises, what to do? Also, tell me, is it mandatory for the current employer to deduct his PF because his PF was continuously deducted by his previous employer.

Regards,
Jeetu Singh Bisht

From United States
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One Question From My Side....PF Deduction is 12% of Basic from Employee Side or can be more for VPF..But what is the max limit from Employer Side from Basic Salary. Can it be more than 12%?
From India, Vadodara
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I want to add one more point to the views of Mr.Jeevarathinam.If PF contributed for the wages more 6500,benefit extended cannot be reverted in future. Thanks & Regards Ramesh C
From India, Bangalore
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Dear All,

Can you please help me understand the PF sheet in Payroll Processing? It contains Capwages, MC, CC, EPS, VPS. Please guide me through the process and formulas to calculate all these in the PF sheet.

Sofiya Setia
Human Resources

From India, New Delhi
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i have 4 yrs experience in statutory compliance handle in hr presently i m jobless do to my health problem now my health is good and i m searching a job pls help me to find a job redards,
From India, Vadodara
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Dear Seniors,

According to the PF Act, the maximum contribution is INR 780 per month. My question is, if an individual earns more than that (for example, around INR 100,000 per month gross salary), is the contribution still limited to INR 780?

I am looking forward to your reply.

Thanks & Regards,
Meghana

From India, Hyderabad
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Dear Sir, Thank u very much for ur reply... Again i have a doubt. Is it not depends on the employee’s decision..? only employer can decide it? Regards, Meghana
From India, Hyderabad
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PF is mandatory for employees receiving wages (basic + DA) below or equal to Rs. 6500 per month. ESI is deducted from the gross salary, not exceeding Rs. 15000 per month. If an employee receives a salary of Rs. 6600 per month, there is no need to cut his/her PF.
From India, New Delhi
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Hi Meghana,

There are various criteria for PF contribution if wages are above ₹6500. Those are:

- If due to an increment or promotion, an employee's wages exceed ₹6500, then it is mandatory.
- If any employee joins newly and their wages are above ₹6500 while joining, and if they had PF contributions in the previous company, then it is compulsory for contributions.
- If both the employee and the employer agree mutually, then they can contribute.

I hope you are clear now.

From India, Bangalore
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Dear Meghana,

Greetings for the day.

Firstly, you must be aware that EPF should be deducted on Basic+DA+Food Allowance (if any). Secondly, the deduction of EPF should be compulsory for those whose salary is less or up to Rs. 6,500. Thirdly, in EPF, there is no rule that above Rs. 6,500, EPF deduction should not be done or restrict the same as a ceiling. Rs. 6,500 is the ceiling only for EPS & EDLI, not for EPF.

Thanks & Regards,

Sumit Kumar Saxena
+91-9899669071

From India, Ghaziabad
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Anonymous
Hi All,

From the posts I have read, it seems that individuals with a basic salary plus DA below 6500 must contribute to PF. However, what happens to those earning more than 6500 as Basic+DA after a salary increment or upon joining the company? Are there any scenarios where PF contributions are not mandatory?

Please provide guidance.

From India, Pune
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There is minimum limit of PF(12% for Basic Salary) if could be increase upto 20%(which is from employee’s basic). ESI is fixe 1.75% which is calculated on Employee’s gross salary.
From India, Delhi
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Dear Axit,

Once you start deducting PF contributions from an employee, if the employee's salary exceeds Rs. 6500.00, the employer does not have the right to stop the PF deduction until the employee resigns or separates from the company. You should adhere to the PF eligibility criteria based on the basic salary + DA amount, not exceeding Rs. 6500.00.

Regards,

Y. Gowree Parameswara Rao

From India, Hyderabad
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Can any one tell me which clause mention that above 6500 of basic PF is voluntary? i want to refer that Act. Tell me that Act of Send me the link for the same
From India, Pune
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Greetings to all the contributors and readers,

Regarding PF, the employee can opt not to be part of PF if his Basic+DA (includes food subsidy) is more than ₹6,501/-. The employer's maximum liability is to contribute 8.33% of ₹6,500 or 8.33% of the actual Basic + DA, whichever is lower. The same rule is applicable to the employee's contribution as well. These are as per Section 6 of the PF & Miscellaneous Provisions Act, 1952.

I have not come across the provision that if the employee has a previous PF account, the same must be continued. Professionals who have read about this concept, please update all of us on which section states this.

Regards,
Janakiram PIPPALLA

From India, Hyderabad
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Respected all Seniors,

Please guide me regarding this. I am working in an FMCG manufacturing company, and most of the production is exported. In our factory, more than 350 workers are employed, all of whom are from the local area, and their daily wages do not exceed 250. Consequently, most workers are not willing to have their Provident Fund (PF) deductions made from their salaries.

My question is, "Are there any rules or laws concerning the above problem?"

Please guide me.

Thank you.

From India, Ahmedabad
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Anonymous
Dear all, what is the maximum range for epf contribution?
From India, Ranchi
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