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EPF to Directors

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Ankur

Work

48 Points Posted on 08 May 2010

Ours is a Pvt. Ltd. company. EPF is applicable on our company and we deduct EPF of 12% from employees and add same contribution from our side and deposit it in SBI. I have a few queries:

1. Can we deduct EPF from Director's Remuneration?

2. What will be the impact of Employer's Contribution in Director's ITR?

3. Is it allowed as per EPF act?

4. If we have a limit of Rs. 6500/- for EPF deduction, is it compulsory to follow the same limit in case of directors?

Replies (1)

Ashish Sharma

Service

1079 Points Posted on 08 May 2010

Answer of you Questions as below.

1. Yes, it is applicable to Director

as per Pf act “employee” means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer. It includes any person -

(i) employed by or through a contractor in or in connection with the work of the establishment

(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 or under the standing orders of the establishment

the director is also employee of company and covered for PF purpose.

2. No effect on ITR as the it is not taxable unless its matured as per Income tax condition prescribed

3 same as Ans. 1

4. An employee who is drawing ‘pay’ above prescribed limit (presently Rs 6,500) can become member with permission of Assistant PF Commissioner, if he and his employer agree. [para 26(6) of EPF Scheme]