Query on pf applicability and calculations

Labour & Industrial 217 views 4 replies

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3469 Points Joined June 2011

Dear Forum

I wish to have your clarification on matters relating to PF. There are 2 cases. In both, the PF is with Government.

Case 1

There are 40 employees in the company. Some have basic salary less than 15,000/- per month; some have basic salary more than 15,000/- pm. Where it is less than 15,000 pm there is PF deduction of 12% on basic salary. If it is more, the employees are given option to join the PF scheme or not. If any body opts to join, there is PF deduction @ 12% on basic salary. If somebody is having 20,000 basic salary pm, there is PF deduction @ 12% on 20,000 ie 2,400/-. If somebody does not want to join, there is no PF deduction.

Case 2

There are 40 employees in the company. Some have basic salary less than 15,000/- per month; some have basic salary more than 15,000/- pm. Where it is less than 15,000 pm there is PF deduction of 12% on basic salary. If it is more, the employees are not given option to decide if they would like to join the PF scheme or not. If somebody is having 20,000 basic salary pm, there is PF deduction @ 12% on 15,000 ie 1,800/-.

Which company is correct as far as compliance of PF provisions are concerned. Is there any non compliance on any company's part.

Regards

Dipjyoti Majumdar

Replies (4)

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3469 Points Joined June 2011

Friends/Seniors

Any responses please.

Regards,

Shivani

Learner

1881 Points Joined December 2012

Both the companies are correct.

Employer cant be forced to contribute above 15000.

however, he may do so if he wishes to as is with Case 1.

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

EPF is mandatory for salary 15000 or below, above the ceiling, they have choice to be contributory or not

if they want to be contributory then employee and employer both have to get agreed upon the contribution should be fixed to 15000 or to the enhenced amount. its upon the mutual understanding between the emplyee and employer,