Can PF deduct on Subsistance allowance? - provident fund.. CiteHR

sacheein Started The Discussion:

Dear All I am in dilemma whether PF should deduct on subsistance all. pls enlighten on. Regards Sacheein

saurav1314 -  Member Since: May 2009
PF contribution is calculated on basic salary plus dearness allowance plus retaining / hardship allowance plus cash value of food concession and not on other components of salary.

Madhu.T.K -  Member Since: Sep 2007
With regard to subsistence allowance there are different views. Since the employee gets subsistence allowance during suspension and therefore, he does not work on these days, no provident fund need to be deducted. But once he is exonerated of the charges and is reinstated he should be paid full salary deducting the subsistence pay already given. At that time, you can deduct the PF.

In the case of ESI also the same reasoning can be applied. But in Popular Automobles Vs Regional Director, ESIC, the Supreme Court has held that subsistence allowance will attract ESI.



pmpatel -  Member Since: Mar 2007
Dear All
Subsistence allowance is not wages and hence PF can't be deducted is my view as subsistence allowance does not satisfy definition of wages/ salary.
I subscribe to the view expressed by Madhu T K
P M Patel

dinesh2205 -  Member Since: Nov 2010
I do agree with Mr. Patel & Madhu T. K. Subsistence allowance will be given during suspension pending inquiry. No PF deduction can be made. Regards, Dinesh Adikane

sacheein -  Member Since: Jun 2008
Dear All

Thanks again your valuable cooperation I am agree with Madhu & patel sir.
I would like to share details regarding this matter.
Subsistence allowance is paid for the survival of the suspended
workers and during the suspension period the concerned workers are
not on duty and employer employee relationship suspended.
Within the meaning of section 2(b) of basic wages- subsistence
allowances paid to the suspended employees does not constitute
wages and not liable for deduction of Provident Fund,
As per CPFC circular dated 31/10/1957 subsistance all is not part of wages.
But subsistance all is part of wages under sec 2(VI) of payament of Wages act & Clause 22 of sec(2) under ESIC act hence ESIC deduction is permissible on Subsistance all.

Hope that it is enough to clear this matter

Sachin Lahane

pmpatel -  Member Since: Mar 2007
Dear Sacheein Can you forwad copy of the circular of pf dt. 31.5.1957 referred in your mail. Regards P M Patel

sacheein -  Member Since: Jun 2008
Dear Sir I does’nt have circular copy but circular date & No is E-104(26-A)-2/7867 dated 31/10/1957, If you got its copy pls send me on Regards Sacheein Lahane


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