Maximum and minimum deduction of pf on salary

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Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2014 Hi Sir/Madam,

I want to know maximum and minimum Deduction of PF on salary.

Thanks.

CA. Ankit Bhandari

CA. Ankit Bhandari (Expert)
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11 June 2014 employer and employee both have to pay a minimum contribution of 12% of basic salary

Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2014 Thanks for your reply.

I read on some website as 780/- is maximum pf any employer can deduct.

So is it truth?

CA. Ankit Bhandari

CA. Ankit Bhandari (Expert)
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11 June 2014 1. When the Basic Salary + Dearness Allowance(DA) does not exceed Rs.6500 and the organisation is covered under the PF Act then in such case it is mandatory on part of the employer or organisation to deduct PF and deposit it with PF fund every month.

2. In case the Basic Salary + DA exceeds Rs.6500 then in such case:
a) the employee has option to get his PF deducted from his salary. It means it becomes optional and it is not mandatory.
b) Option to get PF deducted once exercised cannot be revoked. If once PF is deducted then it continues to be deducted till he the employee is in employment.

Rate of PF is at present 12% and the computation is usually on basic salary, so it will be always 12% of basic.
In this contribution also the sum is segregated into:
i) Provident fund and
ii) Pension fund

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