PF Contribution

Sir, I also never heard about this Rs.780/- per month clause, what i know is the same what u told.

Sir, I never heard about this rule. I also know the same as you told.

Hi vishal... There is such rule existing, but in other way round...

Look, As per the Act the employees who are drawing the Basic + DA equal or less then Rs.6500 ,The deduction for such employees towards PF is manadtory....

This means 6500*12% = Rs.780 are mandatory

Thanks Mr. Dhiraj

Thanks all for your valuable opinions  I also  had never heard about the  Rs 780  p. m clause but just wanted to reconfirm with you all in case there was anything such... 

as per pf act employer has to contribute 10% of basic and DA.It is Income tax act which has specified non taxable limit at 12% of basic and DA.

Yes,  Mr. Dheraj is right. As per PF act, upto 6500/- basic, there is a compulsion on the part of the employer to deduct @ 12% i.e., 780/- and contribute th same % age i.e. 12% to the department making nit a total of 24%. and after 6500/- with the consent of the employer & employee, PF can be deducted but once PF contribution started from 6500, it will continue even though his basic may exceed that 6500 mark.

thanks for the info............ Weeeeeeeeee...........

Agree with Dheeraj that 6500/12= 780 and 12%.

if excess of 12% then it will taxable on the above percent of 12%.

Dear All,

The rule is that employer employing 20 or more staff, has to deduct PF @ 12% on the salary paid. This deduction shall be done only from those employees whose basic+DA exceeds 6500/- per month. So, in case each of the 20 staff have basic+DA less than 6500/- per month, employer need not deduct PF. And in cases of staff whose basic+DA exceeds 6500/- per month, employer can chose to deduct PF on 6500/- i.e for PF calculation, employer can restrict the actual basic+DA to this limit or alternatively employer can chose to deduct PF on actual basic+DA paid to staff .

Employer can also chose to deduct PF on salary paid to employees even if there basic + DA is less than 6500/- as PF act has prescribed the condition for mandatory deduction of PF. But employer has liberty to deduct and deposit PF at their wish as it is a social security contribution for the benefit of the staff.

Sudhanshu