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pbs1414
27

Dear All,

Is somebody help me to solve the query given below-

If any employee basic salary increases Rs. 6500 to Rs. 10000 , is it mandatory under PF Act, that he has to be a member of PF?

Thanks,

Pawan Kashyap

From India, Solon
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Madhu.T.K
Seasoned Ir Professional
P Ramachandran
Hr & Administrative Manager
Pbs1414
Asstt. Manager-hr
Shrinkar
Regional Head , Social Compliance
Poongodikalimuthu
Senior Officer Hr
Swati.jain0104
Executive - Hr
Ksrinivas.hr
Employee
Suhritaguin
Working As Hr Exe.
Prasadkashinath
Hr - Services

Madhu.T.K
4193

Provident Fund once covered will continue irrespective of any hike in salary above the ceiling limit prescribed under the Act. Therefore, if salary of a member becomes, Rs 10000, still, he is a covered member. If the employer thinks that contributions be limited to Rs 6500, he can do so. On the other hand, if the employer is ready to contribute for such higher salary then he can deduct PF for such higher salary and contribute on such salary. Only thing is that while employer making his contributions, Pension Fund contribution shall be limited to 8.33% of Rs 6500 only.
Regards,
Madhu.T.K

From India, Kannur
swati.jain0104
5

Dear Sir,
In continuation to the above query / solution, what should be the done in case, where the employee wants to do his contribution on the increased basice (i.e. Rs. 10000/-) but the employer wants the contribution to be made at Rs. 6500/- (to cut on cost).
Swati

From India, Bangalore
prasadkashinath
Dear Pawan,
Yes... it is mandatory a member of this act will continue the contibution depend on their wish to be down the ceilling or on actual increase basic pay. As Madhu has already described in details.
Kashi
:)

From India, Benaulim
p ramachandran
63

since He is a member already, he has to continue with contribution of the same % on 6500/- or he can contribute more but the company contribution is restricted to 12% on 6500/-. IN no way he is to be excluded when he become a member of pf and exceeds the salary limit prescribed by pf act.
In case a member drawing more than 6501 per month (basic) at the time of joining, he may be excluded from pf contribution,provided he should not be a pf member in his previous employment. In such case you have to get a letter from him in writing that he dont want to be pf member as he is drawing more than the presecribed limit.

From India, Madras
hitesh manchanda
4

Dear Swati,
I guess what you are asking is related to VPF. The VPF (Voluntary PF) option is open to all the employees. An employee can contribute to the PF Fund by VPF of an amount of his choice.
I hope this resolves your querry.
Regards,
Hitesh M.

From India, Delhi
Nitin4hr
Dear Pawankumar,
I believe most of the companies have ctc (Cost to Company) salary structure which includes both side (employee and employer) PF contribution therefore i dont think that employer have any problem on contributing at higher basic as it is not going to increase any cost for employer.
With regards,
Nitin.

From India, Pune
suhritaguin
4

can u all pls make it clear by showing a calculation of the contribution to PF. I knew that the employee can contribute any 12% on his basic even though his basic is more than prescribed limit but the employer can contribute only 12% of 6500/-. If the basic is more still the employer contributes upto 12% of 6500/-. Pls correct me if i m wrong
From India, Pune
Shrinkar
3

Dear Mr. Madhu,
Can you please advise perticular section of the PF act which has mention about continuing the contribution to PF even if the salary goes beyond 6500. As we come across some employees/people who argue. We can show them the scetion of the act.
Best Regards,
Shinkar

From India, Mumbai
ksrinivas.hr
5

Dear, Mr. Madhu has given good reply to you. If employer wants to discontinue the PF Contribution to cost cut. we can take resignation of employee and rejoin in it. bye Srinivas
From India, Hyderabad
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