Special Allowance

farz23 · #1 (**permalink**) 28-12-2007, 08:27 PM

Dear Seniors,

We are paying special allownce as one of our Salary Head.

One of our legal consultant said that the special allowance is applicable for Provident fund deduction. I am quit doubt about this. Can you please guide me for this.

The matter is very important and urgent.

Regards,

Ali

tsivasankaran · #2 (**permalink**) 28-12-2007, 08:35 PM

Yes Any term Special Allowance or Special Pay will attract PF

I tried to make it as Personal Pay and again there had been problems PF Authorities in Tamilnadu did not press after I changed it to Personal Allowance

Also add in the letter sanctioning Personal Allowance that the same may be withdrawn at any time

Siva

farz23 · #3 (**permalink**) 30-12-2007, 02:21 PM

Dear Sir,

Thank you very much for your prompt reply. Can we use term "Incentive" for that ?

Regards,

Ali

tsivasankaran · #4 (**permalink**) 30-12-2007, 02:24 PM

Yes Incentive can be used But you can use Variable Performance Pay and keep modifying it evry year for the individual

Siva

lalhanumanji · #5 (**permalink**) 18-11-2008, 03:29 PM

yes Special allowance is subject to deduction for PF which is evidenced by below judgement
The judgment of regional PF commissioner is as under:
“Special allowance being paid to the employees appeared to be the dearness allowance which has been described by a different name; as such the special allowance would be the part of “basic wages”.” (Regional provident fund commissioner V/s Vivekananda vidya mandir, 2005 LLR 399 (Cal)

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