pf on leave encashment

Practically companies do deduct PF from the leave encashment.

Regards

Anurag

NO PF on Leave Encashment - Supreme court verdict ....enjoy

Central Provident Fund Commissioner Office has issued clarification regarding PF deduction on leave encashment pursuant to recent Supreme Court decision. Office has clarified that no further deduction is required to be made on leave encashment and amount deposited by employers on leave encashment as their contribution will be adjusted against future liablities of establishment if any. In view of this clarification employer is at liberty to adjust the amount already paid on A/c of leave encashment from future payments.

 

Supreme Court in the case of Manipal Academy of Higher Education v/s RPFC decided on 12.3.2008 has held that leave encashment is not part of basic pay for the purpose of PF and hence PF is not applicable on the same