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Dear All,
I need help from yours in regard to some clarifications on Provident Fund:
1) For PF deduction the ceiling basic salary limit is 6500/-. If basic of a member employee increases beyond Rs. 6500' after his having become a member, Is it mandatory to continue or can stop the contribution in PF?
2) On hiring if basic is already more than 6500/- do we need to contribute in PF as mandatory?
3) Are any companies are there who are not contributing because the basic is more than 6500/-?
Kindly help me in getting my queries resolved.
Thanks & Regards
Shilpi
11th September 2008 From India, New Delhi
Dear Shilpi,
1.If Any employees jumps to cross the limit of PF Ceiling his PF should be deducted up to cieling limit (6500) but definately to be deducted being he is already a member of PF and can't cease to be until leaves the organisation.
2. In case of a new member it depends whether he is declaring his past association with other companies on form no. 11 or not. IF was getting his PF deducted their it will be deducted in new company and if not it may not be deducted. PF inspectors hold the power to cross verify these form 11 in case of non contribution of employees. It is really not mendatory in case of a fresher who is getting basic more than 6500.
3. YEs definately there a lot of companies which are not deducting the PF of said employees.
Hope it serves your purpose.
Regards,
Rahul
11th September 2008 From India, Delhi
Ms. SHILPI,
PF MUST BE DEDUCTED in all criteria mentioned by you.... within limit or above limit, company must have to deduct the p.f. from salary[basic+d.a.].
if you are deducting pf, whose basic salary is above 6500/- you will have to get fill up form- 26(6) with employee's consent and with company's undertaking.
Vishal - 9825224504
11th September 2008 From India, Vadodara
Shilpi,
1) If the employee's basic increases beyond Rs.6500/- then the employer have to contribute the minimum amount of Rs.780/-. It is mandatory.
2) On hiring if the basic exceeds 6500/- the PF amount of 780/- has to be deducted if he is aleady a member of PF. Else not required.
3) If the employee joins in the consultant mode then PF does not have to be deducted.
11th September 2008 From India, New Delhi
Thanks everyone. Currently we are contributing PF for all employees @12% of basic but we are planning that for junior management we should stop this practice as they cry for more money in hand. Now with all your replies it seems that we have to continue their PF contribution as they are already a member but we can go ahead with only 780/- as contribution. Right? Please confirm.
12th September 2008 From India, New Delhi
Exactly Shilpi, Since you have already been deducting PF you cannot stop contributing now.
12th September 2008 From India, New Delhi
its again..... so far where i have worked has been contributing on 12% of basic even if the basic exceeds more than 6500/-. You can follow the same procedure if u want to. That is purly what u decide on.
12th September 2008 From India, New Delhi
:-PHi Members, Pl. throw some more on these lines (Shilpi’s query). It will be useful to all. regards, Uniquenaga:icon1::icon1::icon1:
12th September 2008 From India, Madras
It has been discussed in detail about the query raised by shilpi.. if u r looking for more information then be specific on what u want details.
12th September 2008 From India, New Delhi
Dear Shilpi,
It is entirely depends upon the company's policy, that on how much the Principal employer like to contributes towards the PF contribution, can be 12% of the maximum limit of Rs.6500.00 or it can be without any limitations.
Normally the company is depositing flat 12% towards the PF contribution, irrespective of the limitation of Rs.6500.00 nowadays.
Reason for that is as most of the Company has already calculated that amount into the CTC of the employee at the time of salary negotiation.
For e.g. if CTC is Rs.50000.00 per month and the basic is Rs.20000.00 than PF contribution of employee as well as the employer's are included in the CTC (which is Rs. 2400.00 for each @12% of 20000.00), so an amount of Rs.4800.00 is already included the CTC of Rs. 50000.00.
12th September 2008 From India, Delhi
Dear Shilpi,
1. Mandatory to continue the contribution in PF.
2. No. If practice is there for PF contibution irrespective of ceiling, one such employee cannot be descriminated.
3. There may be many cos restricting contibuting PF to salary limit Rs.6500/-
regards
krk rao
12th September 2008 From India, Jaipur
Dear Shilpi, Pf ceiling Rs.6500/- is manditory,for paying/contributing more than ceiling limit is again its depends on employer. Regards Puttaraju.M
12th September 2008 From India, Mumbai
Dear shilpi, you can do more thing, get resignation from your employees and appoint them afresh at higher basic salary.
12th September 2008 From India, Lucknow
Geethanjali,
I dont understand what made u say tht option. Once the employee is an existing PF member then u have to pay atleast the minimum amount of 780/- towards PF even if u hire back them with higher basic salary as u suggested.
I can understand that u must be a fresher.
12th September 2008 From India, New Delhi
Dear Shilpi,
First of thanks a lot for putting up good post. One point i would like to mention is for any employee for whom you are already contributing more than Rs 780 you can not reduce it back to Rs 780. Apart from this visit to www.epfindia.com for more details.
Friends i needed more clarification about what Mr.Vishal as mentioned i.e about Form 26(6).

And thanks to all others who have replied to this particular post.
Regards
Amith R.
12th September 2008 From India, Bangalore
Hello|
PF deductions over and and Rs.6500/- is the discritionary of the mgt. Once you have taken decision for payment of contributionsover and above Rs.6500, you have to pay PF on the above PF wages and can't stop in the meanwhile. it should uniformly to all the employees. Also in the middle you should not stop/fix a higher limt is also not possible.
12th September 2008 From India, Hyderabad
I want to know, if i have some contractual employees with us, is it necessary for us to give PF??
12th September 2008 From India, Gurgaon
if an employee is getting salary 9500/- per month and in the month of june, his salay has been increased up to Rs 12500 in that case ESI should be dedcted but ESI should be deducted on RS 10000/- or Rs 12500/-
12th September 2008 From India, Ludhiana
Varinder, ESI should be calculated only for 9500/- not for 10000/- or 12500/- till the end of september.
12th September 2008 From India, New Delhi
Hi Shilpi,
Opting in , Fixed option or opting out is merely an employee's decision and not employer's.
Hence, when basic increases beyond Rs.6500/-, it is still an employee who has to decide whether to contribute to PF or not.
There are no establishments that have ruled out PF on account of basic beyond Rs.6500/-.
Thanks and Regards
Hema

13th September 2008 From India,
:-PThank you Prathima for your response.
There are two different things in PF dedutions as per the discussions.
i) 12% of Basic
ii) Rs.780/-
My doubts are;
i) Is there any rule or relaxation about the Employer contribution can be fixed ceiling as Rs.780/- to employees who cross 6500/- as Basic;
ii) Is there any strict rule that we should deduct 12% from basic to employees of a new company which is going to introduce PF and all or can we restrict that also as Rs.780/- and
iii) What are all the questions will be encoutered when filing the returns with EPFO office, in case a company restricts its (Employer) contribution as Rs.780/- for those employees who cross Rs.6500/- as Basic and If so, how to defend and overcome with the PF officials?
Kinldy throw more lights on those lines.
regards,
Uniquenaga:icon1::icon1::icon1:
13th September 2008 From India, Madras
Dear Virender,
I am disagree with the saying of Prathima, in this case the employee's contribution will be on the enhance wages (i.e. on 12500.00) till the month of September, he will be exempted from October onwards. For this support I am reproducing the Section 50 of the ESI Act, which will clear the doubts about the same.
50. Wage limit for coverage of employees under the Act
The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be [Six thousand five hundred] rupees a month:
PROVIDED that an employee whose wages (excluding remuneration for overtime work) exceed [Six thousand five hundred] rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.

13th September 2008 From India, Delhi
Yes virendra rajiv is correct. The ESI will be deducted on the gross amount being received by the employee till september salary. From October salary he will be out of ESI but his coverage will continue for next 6 months and he can avail the ESI facility.
13th September 2008 From India, Bangalore
Dear Shilpi,
It is not mandatory to deduct PF form any employee's salary if his/her basic wages are more than Rs. 6500/-. As it is specified in the PF Act as "PF must be deducted from the salary of any employee drawing basic wages upto 6500/-.
But if your employer don't want to contribute/deduct PF on employee drawing more than 6500/-, you can get an undertaking in writing from the employee cpncerned regarding non contribution in PF and thus can evade a complex situation arising out of this..
14th September 2008 From India, New Delhi
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14th September 2008 From India, Delhi

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Hi Prathima,
As PER MY experience with PF commissioner, PF Officials has right to ask for not deducting PF For consultant or any employee. So better keep ceiling limit and deduct and pay ..
Thanks
Mahesh
15th September 2008 From India, Bangalore
Dear Friends,Most of the contraventions are ok. For clarifcation please see the attached PF. CHECK LIST.(earlier posted by me). There is not maxium limit the cealing is Rs. 6500/- (Basic + DA) , if crosses he/she may call it as 'Exempted Employee' . But it is mandatory as a social security of the employees, so every RPF authorities may ask to deduct the PF @ Rs. 6500/- from every exempted employee. It is advisible such deduction which is execpted from Incom Tax perview. Regards,PBS KUMAR
15th September 2008 From India, Kakinada

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Dear all PF and ESI Software available with various forms, returns, challans,for a small sum. place order at kaizenstaffsol.com
27th March 2009 From India, Hyderabad
Hello All, If the contribution towards PF is more than Rs.780/month is it ok to reduce the amount to Rs.780/month Regards, Prasad
3rd June 2009 From India, Bangalore
Dear Shilpi,
1) Law states that PF is mandatory for employees with basic salary limit less than or equal to Rs.6500/- but this cannot be mis-interpreted that employees with greater than Rs.6500/- need no coverage under PF. However, you can leave it to the option of the employee either to contribute upto Rs.6500/- or opt out.
2) On hiring if basic is already more than 6500/- do we need to contribute in PF as mandatory? - It is not mandatory but an option to be left to the decision of the employee.
3) Are any companies are there who are not contributing because the basic is more than 6500/-? - Yes. There are.
But, the best suggestion is not to provide facility to opt out, but to restrict the contribution upto Rs.6500/-. Thanks.
Regards
Hema
11th October 2012 From India,
guys you have confused me completely
pls tell what option is right
1: pf ceiling of 6500 means that pf will be calculated maximum on 6500 means Rs 780 is maximum deduction as per the law employer is obliged too . and above its company wish.
or
2 pf ceiling of 6500 means that maximum deduction (12%) on basic (whatsoever) is Rs 6500 that is employee share in AC no . 1 although 12 % of basic (deduction) is more than 6500.
pls tell
Robin Dhyani
27th December 2012 From India, Delhi
Is it true that Employer contributes equal to employees PF contribution. OR Employer contribution is lmited to Max 12% of 6500/-. Although I had been getiing Basic well above than 6500/- but employer used to deduct PF only 780/-. for evryone.
Please clarify
28th February 2013 From United Kingdom
Dear Friends

The much-awaited minimum monthly pension of Rs.1,000 and a higher wage ceiling of Rs.15,000 for social security schemes run by retirement Fund manager Employees’ Provident Fund Organisation (EPFO) will be implemented from September 1.

The government’s decision to fix pension entitlement of Rs.1,000 under the Employees’ Pension Scheme 1995 (EPFS-95) will immediately benefit 28 lakh pensioners who get less than this amount at present. The move to enhance the minimum wage ceiling for becoming a subscriber of the EPFO to Rs.15,000 a month is expected to bring 50 lakh additional formal sector workers under the ambit of the body.

“The government has notified enhancement of wage ceiling to Rs.15,000 per month, fixed minimum monthly pension at Rs.1,000 under EPS-95 and enhanced the maximum sum assured under the Employees’ Deposit Linked Insurance (EDLI) Scheme to Rs.3 lakh,” EPFO’s Central Provident Fund Commission K. K. Jalan told PTI.

Mr. Jalan said: “Now the maximum sum assured under the EDLI works out to be Rs.3.60 lakh, including 20 per cent ad hoc benefit over the prescribed amount under the notification.” This means that in case an EPFO subscriber dies, his family will be entitled to a maximum sum assured of Rs.3.60 lakh instead of existing Rs.1.56 lakh.

Mr. Jalan said the notification regarding minimum pension, wage ceiling and EDLI would be effected from September 1. Thus all pensioners getting less than Rs 1,000 per month would get at least this much pension from October.

The following may be the impact after the amendment:

1. The employees who have already opted out from PF coverage ( whose basic is above Rs.6500) would be covered under the scheme in case their Basic Wages is higher than Rs.6500 p.m. and upto Rs.15000/- per month.



2. Employees who are exiting PF Members and over a period their basic wages have gone up upto Rs.15000 per month and even above (once member always a member), currently their PF contribution is deducted on a maximum wage limit of Rs, 6500/-, but from now onwards their contribution would be deducted on the actual basic wages upto maximum limit Rs.15000/-p.m.

3. Similarly, the companies who are currently extending PF benefit only on Rs.6500/- irrespective of their wages , may have to increase the PF wages to Rs.15000/- and need to pay the employer contribution of 13.61% on Rs.15000/-

4. The pension amount limit also will increase from Rs.541/- to Rs.1000/-.

5. The employees who current basis wages is less
30th August 2014 From India, Pune

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#Anonymous
Dear Seniors,
In accordance to wage ceiling increase from 6500 to 15000, request to guide that if PF (12%) is deducting on 5000/- basic salary.
EE Share 12% Rs.600/- + ER EPF share 3.67% Rs.184/- = Total Rs.784/-
ER Share 8.33% Rs.417/- contribution deposited in EPS account.
If now wage ceiling is increased, notification will affect to the above calculation or not ?
2nd September 2014 From India, Mumbai
#Anonymous
Hi!!! Dear All, Please help me about how i can communicate with my staff about changes in their salary structure due to change in PF Ceiling. please give me any format of letter. Thanks.
9th September 2014 From India, Pune
Please tell me if the employee earn , more than Rs.15,000(For ex:Rs.20,000 Basic) For this how much amount has to contribute by Employer & Employee
19th February 2015 From India, Bangalore
Ms. SHILPI,
For PF Deduction The Ceiling Basic Salary Limit Is 6500/-. If Basic Of A Member Employee Increases Beyond Rs. 6500' After His Having Become A Member, Is It Mandatory To Continue Or Can Stop The Contribution In PF?
The Ceiling Basic Salary Limit Is 15000/- new amendment,
You can restrict the pf as per statutory norms and can deduct on 6500 (But present 15000 PM.) If member having continue membership so you should do the same but you cant stop the contribution without employees concern.
you have no need to fill the form- 26(6). When employees want to contribute himself more then 12 % PM then you should mandatory fill the form 26 (6) with employee's consent and company's undertaking.
Mayank Panchal
Head HR
Real Namkeen
Nadiad
28th May 2015 From India, Anand
Dear sir,
1.Why ptax deduction is 300 in February,whats reason?
2.If anyone have basic salary 1lac then what's maximum pf deducted ?
Pls confirm.
Regards,
Bhushan Potdar
HR
24th December 2018 From India, Mumbai
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