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PF Deduction Limit

suman (Auditor ) (388 Points)

14 May 2011

I WANT TO KNOW IF SOMEBODY IS GETTING40000 AS BASIC PAY HIS CONTRIBUTION TO PF WILL BE 4800(12% OF 40000) OR IT SHOULD BE 780 (12% OF 6500).

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8 Replies

sanjay singhal (CA) (987 Points)
Replied 14 May 2011

Rs. 4800/-

ADITYA (Manager Finance) (742 Points)
Replied 14 May 2011

As per PF Act the option is open to limit PF contribution upto the salary of Rs 6,500/= i.e. Rs 780/= however, if employer and employee with the mutual consent pay PF contribution on the actual Basic over and above the prescribed limit of Rs 6,500/= it is allowed

HARI SHANKER KUMAR (Sr.Acc.Splist-DuPont) (164 Points)
Replied 14 May 2011

Good question. I have a further doubt on this matter. I remember reading somewhere that only the employers' contribution is restricted to 12% on 6500/- while the employee is mandatorily required to contribute 12% on actual basic. Can anyone clarify how far this stance is true?

venkat chowdary (senior accounts officer) (79 Points)
Replied 16 May 2011

basic 40000 12% =4800 ok

balance 12% from employer side

8.33% & 3.67% portion clarification required

on 780 sir. please help on this

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 16 May 2011

Originally posted by : HARI SHANKER KUMAR
	Good question. I have a further doubt on this matter. I remember reading somewhere that only the employers' contribution is restricted to 12% on 6500/- while the employee is mandatorily required to contribute 12% on actual basic. Can anyone clarify how far this stance is true?

not true

either employee/employer both agree mutually to contribute the PF above 6500 or the follow the ceiling of 6500, if above 6500 is agreed then both have to contribute their shares.