Hi all,
I have been provided with an offer from a company based out of bangalore.
This company has provided me a breakup of my salary structure, under which basic pay is 60% of committed CTC, HRA is 50% of basic and rest being small component i.e. Food allowance, travel allowance, special allowance etc. Being Rs.1000, Rs.3000, Rs.2600 respectvely.
My concern are:
1. My basic pay is 46k per month (which is quite surprising, as gross per month is 77k), inspite of basic being so high my PF contribution is mere Rs.780.
When I checked with the HR fellow on the other end, he said there is some rule in the karnataka governemt, which they are following. Under which both employee and employer contributes flat Rs.780 as PF.
Can someone PLs clarify as, how much I know is that the PF should be 12% of basic and DA.
2. Such a high basic pay would increase my tax liabilites manifold, can someone provide his/her opinion on this
thanks in advance.
Regards.
From India, Indore
I have been provided with an offer from a company based out of bangalore.
This company has provided me a breakup of my salary structure, under which basic pay is 60% of committed CTC, HRA is 50% of basic and rest being small component i.e. Food allowance, travel allowance, special allowance etc. Being Rs.1000, Rs.3000, Rs.2600 respectvely.
My concern are:
1. My basic pay is 46k per month (which is quite surprising, as gross per month is 77k), inspite of basic being so high my PF contribution is mere Rs.780.
When I checked with the HR fellow on the other end, he said there is some rule in the karnataka governemt, which they are following. Under which both employee and employer contributes flat Rs.780 as PF.
Can someone PLs clarify as, how much I know is that the PF should be 12% of basic and DA.
2. Such a high basic pay would increase my tax liabilites manifold, can someone provide his/her opinion on this
thanks in advance.
Regards.
From India, Indore
Hi
As per the PF rules and act, PF can be deducted only up to a ceiling limit of Rs.6500.00, @ 12% i.e., 780.00 hence your company is rightly deducting your PF amounts from your salary.
Mohan Rao
Manager HR
From India, Visakhapatnam
22As per the PF rules and act, PF can be deducted only up to a ceiling limit of Rs.6500.00, @ 12% i.e., 780.00 hence your company is rightly deducting your PF amounts from your salary.
Mohan Rao
Manager HR
From India, Visakhapatnam
the standard rate to decide basic is 40% of CTC for non metro cities or 50 % for metro cities. PF deduction is ok, as they have put a ceiling as rightly said by Mohan.
but you can ask to them to contribute actual 12 % of basic as it will give a big saving to you. i dont think they should have any problem as ultimately that will be deducted from your CTC only resulting into less cash in hand amount.
regards,
From India, New Delhi
but you can ask to them to contribute actual 12 % of basic as it will give a big saving to you. i dont think they should have any problem as ultimately that will be deducted from your CTC only resulting into less cash in hand amount.
regards,
From India, New Delhi
The PF scheme mentions the upper basic level for PF deduction as Rs.6500/-.
But it also specifies that the employee can contribute more to the fund as a mutual understanding between the employee and the employer. Also Sharmaneesu; the organisation might have a problem 'cause the employer contribution part of the PF would go up exponentially if we increase Mayank's PF contribution.
As far as the percentage of CTC as basic amount goes; there is no ground rule.
but generally the accepted percentage is around 35-45%
From India
But it also specifies that the employee can contribute more to the fund as a mutual understanding between the employee and the employer. Also Sharmaneesu; the organisation might have a problem 'cause the employer contribution part of the PF would go up exponentially if we increase Mayank's PF contribution.
As far as the percentage of CTC as basic amount goes; there is no ground rule.
but generally the accepted percentage is around 35-45%
From India
The above discussions have clarified that the employer is correctly limiting the contibution to Rs.780/- per month.
If you wish to contribute a higher amount to your PF account, you can advise your employer to deduct some percentage of basic salary as voluntary PF.
In this case, the employer would not contribute anything to your PF except the statutory amount of Rs.780/-
This way you can contribute more to your PF account and also save tax this way.
Hope this would help you.
From India, New Delhi
If you wish to contribute a higher amount to your PF account, you can advise your employer to deduct some percentage of basic salary as voluntary PF.
In this case, the employer would not contribute anything to your PF except the statutory amount of Rs.780/-
This way you can contribute more to your PF account and also save tax this way.
Hope this would help you.
From India, New Delhi
Yes Gratuity and PF can be paid together.
In fact most of the organizations are covered under the PF as well as the Gratuity law.
In case you wish to know something specific, please state your query clearly so that we can help you.
From India, New Delhi
In fact most of the organizations are covered under the PF as well as the Gratuity law.
In case you wish to know something specific, please state your query clearly so that we can help you.
From India, New Delhi
The law only covers minimum wages to check labour exploitation. Since your CTC and basic are much higher, no law is applicable and varies from company to company. The basic is generally limited, as employers share of bonus, EL, gratuity, LTC etc are linked to it. The PF component has a ceiling as explained above i.e. Rs 780/- PM; however your share can be increased equivalent to your basic and is advised as best form of safe saving and do remember that your pension (8.33% share of employer) is applicable to you too after 10 years of service.
From India, Delhi
From India, Delhi
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