Dear All, This is regarding a PF clarification.
If an employee's basic is 3000 and the increment of 500 is given with retrospective effect for the prior 8 months, what would be PF amount to be deducted in the month when the arrear increment is paid? Is PF limited to 780 due to the fact that the basic pay goes beyond 6.5K or Should we calculate on a monthly basis (500*12%*7)+(3500*12%) and deduct thereon? Pls advice
Thanks
Sahir basha
9943255665
Hi,
As per your explanation if the Company is registered with PF Dept stating that the PF is limited to 6500-00, at that time you can restrict the amount to 780-00 irrespective of any excess amount and if the company is registered to pay 12% of Basic as PF on Salary then, the whole amount can be shown for PF calculation purpose.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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