PF is not calculated with Gross salary. It is calculated with the Basic component of the salary.i.e. a salary consists of Basic, HRA, other allowances, Conveyance etc as components. In this the Basic alone is taken and 12% of that is calculated as PF.
In your friend's case, Rs. 12500 should be his gross salary out of which Rs. 6500 should be his Basic. From this 12% would be Rs. 780 which is deducted as Employee PF.
MINIMUM AMOUNT OF PF DEDUCTION IS 12% OF RS 6500 (BASIC SALARY) IF YOUR FRIEND BASIC SALARY IS RS.12500 OR MORE THAN IT .THEN IF EMPLOYER WANT THEN PF CAN DEDUCT ON RS.12500.BUT IF YOUR EMPLOYER DNT WANNA DEDUCT ON TOTAL BASIC SALARY I.E RS 12,500. THEN U HAVE TO DEDUCT PF ATLEAST ON RS.6500 (BASIC SALARY).
AT THE TIME OF INSPECTION,IF PF INSPECTION TAKE ANY OBJECTION THEN U CAN CLEAR HIM THAt YOU ARE DEDUCTION PF ON RS.6500 (BASIC SALARY)I.E RS.780.
Thanks all.My friend's basic+DA is 12500 and not the gross.Everyone has posted different replies.Can anyone pls tell me what is as per the law?Is it as per the law that if the employer wishes he can choose to deduct only the min required amount(780)no matter what the actual basic is???
PF act says that you have to deduct 12% of basic +DA if the same is less than 6500 and if it is equal to or more than 6500, we have to deposit 780as PF.
Further, can anybody advice me the amount of voluntary contribution that an employee can do to his own PF account? does that has any limit.
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Topic Categories >> basic pay basic salary central government employers contribution job profile Location-India-Ahmadabad minimum wages pension fund pension scheme pf account pf deduction pf inspection provident fund
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