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Just check on this as far I know that PF is applicable on basic & DA and not VDA. However check and revert.
Your accounts deptt is correct and please do a search on the site ( which is on the top left – one would get the notification on this.
5th July 2006 From India, Pune
PF contribution on Leave encashment is payable only on Basic and Da
as being done on salary as per act.
Considering gross for PF deductions is a vouluntary act.Similar is the leave encashmnent status.
6th July 2006 From United States
PF contribution is given on Basic and D.A., but in case the D.A. is not included in the salary strucyture it is calculated on the basic only.
Kindly read about the PF laws to know more on the PF contribution your company is calculating on the gross salary, I dont think that is right.
6th July 2006 From India, Delhi
As per p.f. Act contribution is subjected to wages of the employee's
as per the definition wages means (Basic + DA + Food Concession)
If we calculate the pf contribution on leave encashment. Kindly let me know on which head in payroll we have to put the amount of leave encashment.
1. Should we distribute that amount in Basic + DA + Food Concession?
2. Should we put that amount as Arrear?
3. Should we put that amount on a new head "leave encashment"?
If we follow 1. The amount of earning, increase in that particular month, what should our clarification of this increase
If we follow 2. What should our clarification of this arrear.
If we follow 3. Keeping in view the definition of wages as per pf department (Basic + DA + Food Concession) can we deduct p.f. on this head
Kindly clear my confusion
12th June 2008
You are paying PF contribution pn Gross. You will continue to the same.
Let me assume that your are not in Tamilnadu where High Court Judgement is clear about PF contribution on KLeave encashemnt.
Are you paying Gross for Leave encahement or aqre you paying only Basis plus DA plus VDA
If you are paying Gross as leave encashement and if your practice is is to contribute PF on gross, then you need to pay on gross.
If you are paying only Basic plus DA plus VDA for leave encashment, then you need to contribute only on these three elements.
12th June 2008 From India, Chennai
In a notification by the EPFO in May 2008 (on a judgement by the Hon'ble Supreme Court dt.12.03.2008) (a) has decided to discontinue PF deduction on Leave Encashment.and (b) where PF contribution of the employees' share has been received in the offices of the EPFO, the same shall be adjusted against future liabilities.
Hope this clarifies the status regarding PF deduction of LEAVE ENCASHMENT.
Best Wishes & Regards
13th June 2008 From India, Lucknow
As of now we have come accross with the SC judgement only. But you are noting here that, the respective notification has been issued by PF department in May, 2008. I request you to please scan and attach the same (if available) to this thread for the knowledge and reference of all our professional friends.
Thanks & best regards,
16th June 2008 From India, Mumbai
every on who had subscribed this thred
I have circular from the Ministry of Labour Govt. of India with Provident Fund Head office Delhi of dated 05th may 2008 stating that with immediate effect it is not necessary to deduct Pf contribution on leave encashment amount.
find herewith the circular
and feel free from the headache for the deduction of Pf contribution on leave encashment and from various views
17th June 2008 From India, Pune