The Ceiling of Salary of Rs. 6,500 pm has now become a mere figure in the books. It is under proposal to enhance this limit to 10,000 pm which will be made sooner or later. There are 2 ways to make this. The problem is generally with the employer's contribution and every employer wants to restrict to the present limit i. .e 6,500 pm only. In such a case, Basic + DA should be just to the limit and rest are paid by way of allowance. Second way is to consider a certain amount say Rs. 10,000 out of the total salary on which PF contributions can be paid and the rest amount is paid as allowances. This has benefits to employee, as more saving to PF from own salary and also employer's contribution up to Rs. 10,000. What you save today helps you in future. I have always suggested this method to many employers and that's working fine.
17th October 2013 From India, Kolhapur