EPF AND ESI APPLICABLITY

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This discussion clarifies that businesses cannot simply withdraw from EPF and ESI compliance if their employee count falls below 20. While a permanent reduction in staff might allow an application to the PF Commissioner to close registration, the initial applicability remains. The calculation for EPF and ESI typically includes basic salary plus allowances, though some organisations may only use basic salary or basic plus Dearness Allowance (DA).

SHAMNHU NATH TRIVEDI

SHAMNHU NATH TRIVEDI (Querist)
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09 March 2020 One of my Client has No of Employee above 20 ESI & EPF was applicable to Him, Now No of Employee falls below 10 Whether he may be withdraw from Compliance of ESI & EPF
2. I further want to know Whether Basic Salary will be taken For Calculation of EPF & ESI or It will have to Take Basic Salary Plus all allowances for Such Calcualtion

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 March 2020 1 No such withdrawal not allowed.
2 It's basic salary plus allowance.

Eswar Reddy S

Eswar Reddy S (Expert)
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09 March 2020 If the fall is permanent then you may make an application to PF Commissioner to close PF reg to sustain the organisation from compliance burden.. For PF calculation , salary has limited scope, mostly it include basic+DA+Conveyance+Special allowance.But in practice most of the organisations use Basic salary only(Few org basic +DA)

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