Minimum Basic for deduction of EPF

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 May 2010 Dear Mr. Ramesh Krishnan,
I got your reply but my question was different. to be very specific, i wanted to know whether there is any slab or ceiling to be considered as minimum amount as basic pay which can be considered for ascertaining pf contribution for an employee whose gross monthly salary is 6500 as per the existing minimum wages rules in Delhi.
is is permissible to fix basic as any amount like 500 or 1000 and rest amount be structured as DA, HRA, medical allowance, commuting allowance etc.?
pls. help me out to get clarity on the issue.
Regadrs,

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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08 May 2010 Yes it is permissible. Wages as defined for PF Calculation:

 “Basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include:

(i) the cash value of any food concession;
(ii) any dearness allowance, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance.
(iii) any presents made by the employer;
For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working for retaining his services.

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