PF CONTRIBUTION ON LEAVE ENCASHMENT ********URGENT
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PF CONTRIBUTION ON LEAVE ENCASHMENT ********URGENT

MOHANSHARMA Started The Discussion:

Dear friends

I am new to this forum and seeking your advise for the first time: it is very urgent and I have to give feedback to my management immediately

OUR COMPANY IS PAYING PF CONTIBUTION ON GROSS PAY INSTEAD OF BASIC+DA+ VDA SINCE LONG TIME.

NOW THE PROBLEM IS WITH PF CONTRIBUTION ON LEAVE ENCASHMENT.

OUR ACCOUNTS SAY WE SHOULD ONLY CALCULATE ON BASIC AND DA ON THE LEAVE ENCASHMENT AND PAY PF CONTRIBUTION OF 12%

BUT MY HR COLLEAGUE SAYS WE SHOULD CALCULATE 12% ON THE ENTIRE AMOUNT OF LEAVE ENCASHMENT

CAN ANY OF THE EXPERT IN LAW EDUCATE ME ON THE FOLLOWING

WHAT DOES PF COMMISSIONARATE MEAN ABOUT: PF CONTRIBUTION ON LEAVE ENCASHMENT.


very urgent reply is solicited. calculation procedure is also apreciated

-MOHAN SHARMA :?:

Rajat Joshi - Member Since: Oct 2007
Dear Mohan Sharma,

Welcome to the forum..


Quote:
OUR COMPANY IS PAYING PF CONTIBUTION ON GROSS PAY INSTEAD OF BASIC+DA+ VDA SINCE LONG TIME.
Just check on this as far I know that PF is applicable on basic & DA and not VDA. However check and revert.
Quote:
NOW THE PROBLEM IS WITH PF CONTRIBUTION ON LEAVE ENCASHMENT.

OUR ACCOUNTS SAY WE SHOULD ONLY CALCULATE ON BASIC AND DA ON THE LEAVE ENCASHMENT AND PAY PF CONTRIBUTION OF 12%

BUT MY HR COLLEAGUE SAYS WE SHOULD CALCULATE 12% ON THE ENTIRE AMOUNT OF LEAVE ENCASHMENT

CAN ANY OF THE EXPERT IN LAW EDUCATE ME ON THE FOLLOWING


WHAT DOES PF COMMISSIONARATE MEAN ABOUT: PF CONTRIBUTION ON LEAVE ENCASHMENT.
Your accounts deptt is correct and please do a search on the site ( which is on the top left – one would get the notification on this.


Cheers,

Rajat

hrg - Member Since: Jun 2006
hi
PF contribution on Leave encashment is payable only on Basic and Da
as being done on salary as per act.
Considering gross for PF deductions is a vouluntary act.Similar is the leave encashmnent status.
hrh-rajaram

archnahr - Member Since: Jun 2006
Hi.

PF contribution is given on Basic and D.A., but in case the D.A. is not included in the salary strucyture it is calculated on the basic only.

Kindly read about the PF laws to know more on the PF contribution your company is calculating on the gross salary, I dont think that is right.

Archna

archnahr - Member Since: Jun 2006
Hi.

PF contribution is given on Basic and D.A., but in case the D.A. is not included in the salary strucyture it is calculated on the basic only.

Kindly read about the PF laws to know more on the PF contribution your company is calculating on the gross salary, I dont think that is right.

Archna

vangapandu - Member Since: Jul 2006
PF is calculated on Basic i.e 12% and with the latest amendemnts PF also should be paid for Leave Encashment. IF there is a DA concept PF is calculated on BASIC+DA

Hope this clairifies ur doubt

Mahesh

vikasdeepa_arora - Member Since: Nov 2005
PF is calculated on Basic ie. 12 % is salary str doesnt contain DA but is it contains DA then PF is calculated on PF + DA. L

Leave encashment is subject to PF deduction ie 12 % of basic or basic + DA depending upon the salary str.

Deepa

Asha2005 - Member Since: Aug 2005
Hi, what your accounts dept said is right..Pf deduction is from 12% of BAsic +DA(Employer & employee contribution) but for ESI 4.75 & 1.75% respectively the deducton is calculated from the gross.

rcjoshi7 - Member Since: Mar 2008
HI,
As per p.f. Act contribution is subjected to wages of the employee's

as per the definition wages means (Basic + DA + Food Concession)

If we calculate the pf contribution on leave encashment. Kindly let me know on which head in payroll we have to put the amount of leave encashment.

1. Should we distribute that amount in Basic + DA + Food Concession?
2. Should we put that amount as Arrear?
3. Should we put that amount on a new head "leave encashment"?

If we follow 1. The amount of earning, increase in that particular month, what should our clarification of this increase

If we follow 2. What should our clarification of this arrear.
If we follow 3. Keeping in view the definition of wages as per pf department (Basic + DA + Food Concession) can we deduct p.f. on this head

Kindly clear my confusion

Regards
R.C.Joshi

Amit Pawar - Member Since: Jan 2007
Dear Friends,

Previously PF calculated only on Basic+ DA & on Leave encashment but as per latest amendments on 12.03.2008 There will be no deduction of PF on Leave encashment. Please find attached Supreme Court Judgement copy for your reference.


Attached FilesProvided by community member Amit Pawar. Join us to learn and grow with your peers.
File Type: doc SC -PF judgment on No PF on Leave encashment.doc (52.5 KB, 900 views)


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