If the basic amount of 8 employees is 500000 Rs. and of the all the employees the basic pay is more than Rs.6500. Compute the Employer contribution with Explanations.
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 19 January 2010
Hi!!!
Regarding PF :
1. If the employee basic wages exceeding Rs.6500/-, there is no liability on the part of employer to pay PF contribution.
2. If employee joined with less than above basic, continuing service with more than the basic of Rs.6500/- , employer bound to pay PF contribution on the Rs.6500/- only (.i.e.Rs.780/-), eventhough his basic salary more than that.
CA.Sonia
(professional)
(517 Points)
Replied 19 January 2010
Still the employer can contribute if the basic wage exceeds 6500 can calculate for Rs.500000
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 19 January 2010
Yes employer can contribute an amount equivalent to employees contribution i.e 12% taking Income tax benefit in mind. The amount can be deducted from employees and deposited in RPF the same amount employer can deposit as employer's contribution.
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 19 January 2010
In the given case as the number of employee is less than 20 and basic amount is more than Rs6500. No liabilty arises to employer.
Suresh M
(Financial Analyst)
(124 Points)
Replied 20 January 2010
1. In General, employees drawing more then Rs. 6500 per month are excluded, but employer can include them by applying to PF commissioner. These employees can be counted as normal employees. I know companies are deducting PF though none of their employees salary < Rs. 50K PM.
2. The PF ACT is applicable only when the # of employees are at least 20.
3. PF continues to apply though the number of employees are less then 20 at any point of time after registered with PF ACT.
in this case
a. If your company registered under PF earlier with 20 employees, then the liability would be Rs. 60K (12% on 5 L) + 1.67% on 5L (approx.) for administrative charges, though only 8 employees.
b. If Not registered, NO LIABILITY.
"Rs. 6500 not playing big roll in PF Act"
Anup rathi
(CA FINAL)
(268 Points)
Replied 20 January 2010
Actually watever is the basic pay of employee
employer can contribute @ 12% of basic pay kipin d tax benefit related to it
CAclubindia
