Jhuma Tiwade
Manager- Human Resources
Hr, Legal Compliance & Er-ir
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Can the employer decide not to give PF benefit? Can an employee refuse for PF benefit? Pls clarify.
From India, Mumbai

The organisation whose employees strength is 20 or more and the basic+da salary is 6500 or less Pf act applies. employeer and employee dosent have any option to opt or not to opt for PF , it will be compulsory for both.
From India, Mumbai
What if employee strength is more than 20 & salary + DA is more than 6500/mth. regards Khushi
From India, Delhi
during joining of an org, an employee basic salary is Rs.6500 per month then it is mgt decision to give PF or not but this is at the time of joining only, an employer cannot say no to give pf, who has got increment above 6500 basic salary on continuation of service.
pl correct me if i am wrong

From India, Hyderabad
First, it is a statutory compliance to deduct PF if the employee of an organisation whose strength is 20 or more, is getting 6500/- or less per month(Basic + DA only). Noone can opt any decision contrary to that.
Secondly, If an employee is already covered under PF then it does not matter what his salary is this time.
The case will remain same if he comes from another companies where he was covered ,to a company where PF Applies whether he crosses the limit of 6500/- per month.
Last, If a new employee joins who was not covered before(may be a fresher or whoever) & his Basic + DA is more than 6500/- per month then it is the employer who may decide whether to include him in PF or not.
From India, Calcutta
thanks Mr. Jain for your valuable info. Pls clarify one more thing. What if an employee joins from a company where PF was offered to a company where PF is not covered?
Does it still call for legal compliance.
From India, Mumbai
if employees are only 3-5 and employee want to apply PF.. then ? what can be done according to law ? please reply
From India, Chennai
can anyone help me ? I want the complete list of rate of interest on PF contribution from FY2000-01 to till now?
From India, Calcutta
Employer have to deduct 12% of the basic + D.A. for th PF contribution if more than 20 employees are working in the organisation but if the employee does not want to take this benefit then he will have to fill form-11 and submit to RPFC
From India, Dehra Dun
Could you please clarify the second point of the employee coming from "A" organisation where he/she was covered under PF now joining organisation "B" (basic above Rs.6,500 and employee strength of over 20), will the organisation "B" be required to cover the person under PF?
From India, Delhi
Dear All,

Let's put it in the following manner :-

1. Company having less than 20 employees are not coming under the perview of PF statute hence he is not duty bound to cover his employees under PF. If the employees insist for PF coverage as a good gesture the employer may agree but the decision is entirely employer's own.

2. Company having more than 20 employees are are bound to cover employees under PF. There my be employees with basic + DA below Rs 6500 and employees with basic + DA more than Rs 6500/- . While PF coverage for the employees with Rs 6500/- is a must the other category with over Rs 6500/- is optional.

3. If an employee was covered under PF with his previous employer, now joining a company with a basic + DA over Rs 6500/- will be covered under the PF statute.

4. If the employee strength of an organisation comes down below 20 say from 60 to 15even then the employer will have to contribute to PF for the remaining employees.

The Regional PF Commissioner may take legal action againast an employer for non compliance & violation of Act.
From India, Calcutta
Dear Jhuma,
PF gets an optional choice both for employee and employer if basic is more than Rs. 6500/-
In this case its on employee or employer mutual consent that either to deduct it or not. Their is no complusion of deduction Pf on more than 6500/-
From India, New Delhi
As per Provident Fund MP Act, 1952 Provident Fund deduction is compulsory from the day one.
You can exempt the employee if his/her salary/wages more than Rs.6500/- (Basic+DA or Basic) at the time of joining - i.e. exemptem employee
In case if the employee is willing to join in Provident Fund even if his/her salary more than Rs.6500/- pm the provident fund contributions can be restricted to Rs.6500/- only
Or otherwise if both employee and employer are willing to contribute Pf contributions for the employee salary / wage is more than Rs.6500/- at the time of joining pf deductions can be made with written consent.
But employer cannot have right to stop PF deductions from out of the salary/wages of employees and at the same time employee has no right to refuse such deductions from their salary/wages.
Hope the above is suffice
Tks & Regards
From India, Hyderabad
I just would like to point out that some members use the cite to shirk doing minimum work on their own.look at this question* Is paying PF optional?"Young members should read the basics & ask clarifications where intricate interpretations are involved or there is a lack of clarity.
A casual approach could put you in difficuliy since you are blindly depending on opinions of individuals. The basic law is not opinion & it has to be read.
This is a valuable & useful cite. But use it with discretion for best benefits. " I would like to start an ADVt firm. Can anyone give suggestions?" like queries would not be in the spirit of a cite of serious HR professionals.
Warm Regards
From India, Bellary
Hello All,
I have a question:
As per the PF Act, deduction of PF beyond Rs.6500/- becomes optional for the Employee and Employer.
If an Employee and Employer decides not to exercise the option of deduction of PF beyond Rs 6500/- ( that is limiting the Basic to Rs.6500/-), will it in anyway effect the Gratuity calculation?
Can an employer use Rs.6500/- Basic Pay for PF purposes and use a different Basic Pay (Say Rs 25,000/- Basic Pay) for Gratuity purpose?
Thanks in advance....
From United States, Newport Beach
Provident Fund amount is calculated from Basic Salary only. So I have stated accordingly. As per your statement PF@12 should be deducted from earned basic salary only rather than fixed basic salary.

PF is deducted @ 12 % of basic pay from employee salary. Employer also contributes same amount (12 % of basic) to PF account of an employee. The employer’s contribution is tax-free up to 12 per cent of the salary. Any contribution by the employer over and above this limit of 12 % is taxed in the year in which it accrues. So we have deduct PF amount from an employee from his Earned Gross Salary of 12% rather than Fixed Gross Salary.

Example Case Study:

If your basic salary is Rs 10,000 per month (dearness allowance does not form part of the pay) and the employer contributes Rs 1,500 per month towards RPF, 12 per cent of the basic salary, i.e. Rs 1,200 will be tax-free and the balance Rs 300 will be taxed. RPF also entitles you to rebate under Section 88. Interest up to 9.5 per cent per annum is exempt from tax and any rate higher than this is taxed.

PF @ 12% is to be deducted from the earned BASIC SALARY, not on the earned gross salary.
From India, Madras
Dear friends Anybody can give me pf calculation for making pf challan. There is one staff and basic is Rs.7750/-. Please do the needful. Sanjay
From India, Mumbai
Does this mean that if while a person is joining an org and the org. has PF, if the employee has basic+DA more than 6500, the employer has the option of giving the PF or not?
Also, contractors should be included in PF ? like contract - office attendent, security, or tech support contract staff hired as contractors?
From India, Bangalore
Dear Jhuma,
It is one situation only, in which employer can decide about pf deduction of an employee and that is if at the time of joining employee's basic +da is more than 6500, provided that earlier no pf was deducting from his/her salary.
Otherwise it is not discretion of employer and not the employee, it is a statuary compliance and both parties will have to comply it.
Rajesh Sharma
From India, Delhi
No PF is not optional. every employee has to be incorporated in PF, a minimum of 10 employees should be there at the time of starting PF.
From India, Bangalore
1.first check the PF act is applicable to your arae or not

2.there are two kinds of organisations. one exempt and other not exempt. In the former the company can have its own fund and will control the funds as per the directiions. other we have to follow the procedure laid down by the act and rules.

3. Any employee who draws morethan 6500 has to be covered under the act.

4. in case it is more than 6500/ per month (Basic and DA), the company will have two options

a. not to cover them, because there are no legal obligataions

b. to get th eemployee's good will they will be covered. again there are two more sub-options

a. if the company wants to cover them let them be covered to the extent of 6500/ only for the remaining amount need not be covered

b. to cover them for the full ammount

But i always feel that we should follow the law. Don't cover them. But they can b reimbursed in many other ways. This will keep the employee happy and also we are following the law to avoid complications


From India, Bangalore
PF can be optional ;
1) if the emplyer is emplying less then 20 employees PF and miscellaneous provisions act and rules made there under is not applecable to that organisation.
2) if the employer is employing 20 or more then employees then it can take exemption from the above mentioned act from the RPFC .
3) For an organisation which is covered under the above mentioned act and an employees wants to get exempted ( if his salary is Rs. 6500/- PM or less then Rs. 6500/- PM) he can seek special permission from the RPFC.
4) if his salary is more then Rs. 6500/- PM he can seek exemtion from his employer by giving a written statement of exemtption.
I hope this is wat u require.
From India, Jaipur
The Employees Provident Funds and Miscellaneous Provision Act, 1952 basically came into existance, to ensure compulsory PF, EPS etc for the benefit of employees.
Assuming your company comes under the act, (check appilcability), it is a compulsory provision for them to follow. So I guess even if the employee doesnt want to, the company has to.
Lets see what others say.
From India, Visakhapatnam
Dear Jhuma,
Optional PF is in only one condition. That is....when employee's Basic Pay is More than equal to 10,000/- pm.
Other wise it is compulsory to deduct and make same contribution by the employeer.
I hope it make sense 4 u...
Thanx & Rgds
Bhagwan Tolani
Sr. HR.
TM Group

From India, Mumbai
No one can deny the PF withdrawal or transfer, if employer dining goes to near PF office, one cell is there vigilance department write the application mention company and your PF number and company name after that the employer will call you for the compromise.

if you have any problem call to area pf inspector better (you can call to main office and ask for area inspector mobile number)

From India, Delhi
If the establishment is engaging employees 20 or more and the basic+da salary is 6500 or less the Pf Act will apply. As per the Act it is mandatory not optional. It will be compulsory for both.
From India, Delhi
Please appreciate the following:
1. If an organization is eligible for coverage under the PF Act/Scheme, it is mandatory, not optional.
2. If all employees are on a salary of Rs.6500/- or more, coverage is not necessary.
3. If an employee, who was a PF member in his earlier Co. joins another Co. wich is not covered under PF, he will not enjoy the benefits of PF since the new Co. is not covered under the PF ACT.
4. However, most progressive organizations, irrespective of the qualifying criteria, do extend the benefit of PF to its employees.
Best Wishes,
Vasant Nair
From India, Mumbai
i think , In case of less than 20 employees , its the wish of the employeer to give pf or not ..... it is of voluntary basis if less than 20 employees...........
and regarding that 12% i think 10% from basic and 2% from da.........
From India, Pondicherry
Dear Mr. Rational Raj,

First of all I would like to clarify that lengthy questions will never get you replies, people have no time to read. Secondly a simple question will always give you different perspectives and learnings.

I am sure all of us have atleast some new info out of it. Even we are aware of basics but there was a reason for posting this question.

Even I refrain from posting non relevant mails.I am sure that this question was not a wastage of server space and time.

QUOTE=rationalraj;867625]I just would like to point out that some members use the cite to shirk doing minimum work on their own.look at this question* Is paying PF optional?"Young members should read the basics & ask clarifications where intricate interpretations are involved or there is a lack of clarity.
A casual approach could put you in difficuliy since you are blindly depending on opinions of individuals. The basic law is not opinion & it has to be read.
This is a valuable & useful cite. But use it with discretion for best benefits. " I would like to start an ADVt firm. Can anyone give suggestions?" like queries would not be in the spirit of a cite of serious HR professionals.
Warm Regards
From India, Mumbai
First, it is a statutory compliance to deduct PF if the employee of an organisation whose strength is 20 or more, is getting 6500/- or less per month(Basic + DA only).
and beyond the crossing the selling of P.F. it totally depands upon emloyer whether he provides or not.
With regards
Balvinder Singh
From India, Delhi
Yes PF is optional if employee's basic rate is higher then 6500, form no-11 will deposited only and the one will count as exempted. & pf only will deduct on earned basic & gratuety on last basic rate.
From India, Gurgaon
also the employer can fix an upper limit (cut off) for thr pf. so the minimum contribution will be at the cut off for both employer and employee. the employee may however increase his share of the contribution as VPF.
From India, Bangalore
Everybody has a right to his own opinion, and as a person who started this thread, you should not attack his comments.
In fact I also consider your question trivial, to say the least; and foolish and silly, to speak of my opinion.
I was going to post my opinion, but refrained because I found member taking your question seriously and giving their opinions.
However, I compliment rationalraj to come out with his honest and true opinion.
Kindly think about your question again.
From India, Delhi
Yes Rationalraj, I agree with you notwithstanding the explanation given by the thread-starter, Jhuma Tiwade. It seem her explanation is in hindsight, based on the response. In fact the responses of our members have brought glory to this silly, childish question.

Dear Members,

Let us take a look at the question again......

What is the purpose of asking this question is not given.

On the same vein, can I ask a question like, "Can the employer decide not to deduct Income Tax ? Can an employee refuse for give Income Tax?"

or "[B]Can the employer decide not to give salary ?"

Someone asks "What is HR?". Another comes up with "Suggest a name for my shop".

One can go on ad absurdum.

It is good that thelpful CiteHR members always help with their views.

But some line should be drawn on what is a good question or a bad question; or even an acceptable question.

One should not be allowed to get away with anything that comes to one's mind.

The poster's argument that: "I am sure all of us have atleast some new info out of it. Even we are aware of basics but there was a reason for posting this question." is neither acceptable nor correct.

There was no new learning involved here. Everything is there in the ACt. One hs to take the trouble of studying the Act, rather than shirking from taking any pains, as you have rightly observed.

Secondly, the poster has still not disclosed the reason for asking this question. But many of us now know the reason.

From India, Delhi
can you people tell me how i can get back my PF amount from company.Actually in my previous company my 40,000 Rs deposit with them as a PF amount. i leave the company this year feb.
From India, Patna
Hello Sir,
Can you please give exect rule of PF? I am getting salary more than Rs 6500 and I dont want to deduct PF and ESI from my salary. Is this possible? Please guide me. Please give any website or book for PF rules so that I can refer it.
From India, Ahmadabad
I too fully agree with my frineds who have opined that this CITE should be used in a meaningful manner.
I have also in my earlier responses stated that if one were to ask specific questions, they would get specific answers.
This valuable CITE should not be thought of a soft option where someone else is expected to do the hard work for you.
A Personal Manager (he called himself this) wanted to know if he was required to pay for not giving Notice Period.
Someone wanted to know if, in am interview, a Female candidate can be asked questions about her plans for starting a family. There were several responses which carried detailed account of the Maternity Benefit Act, which was totally irrelevant.
We should all be a little more serious and acreful about using this platform as a learning ground.
Best Wishes,
Vasant Nair
From India, Mumbai
dear Anoopa it is not mandatory to deduct PF contribution from him because his basic is more then 6500, so it totally depend on the mutual understanding between the organisation and him. Chandra
From India, Gurgaon
I really feel pity that people have wasted their time on generalizing whether the post was silly and deciding whether whoever started is dumb.
I had posted this very simple to some silly questions b,coz one of my friends has been in the above situation and we had good dicsussion . Hence I felt like like having a human resource perspective and not the bookish knowledge.As I clarified That i wanted to avoid the entire mahabharat, I had posted the one liner. If you felt it was silly, You shouldn,t have replied to it. You have no right to justify any body's threads.
Just not done yaar. Very bad.
From India, Mumbai
2 months after you quit the company you can withdraw your PF by filling up application forms (form 10c and form 19) available with your employer. you will also need to attached a cancelled cheque leaf for the money to be transferred. submit the forms and the cheque to the employer and they will take care of the rest. regular follow up is a must. PF office claims that the money will be transferred within 90 days but be ready if it takes longer.

From India, Bangalore
I agree with u Mr. Tiwade. ppl hv written loooong replies on how threads should be n stuff but want one liner posts. lol.
From India, Bangalore
Dear Jhuma

There is a phrase called "with reference to context".

Just like you explained in this post (which has made the situation very clear) had you asked/framed the question with a reference to context like :

"One of my friend was arguing that "PF need not be mandatory, it can be optional". Is he correct ?"

It would have solved the problem, without it being a LENGTHY QUESTION.

But simply asking "Can PF be optional ?" !!! Its like asking "Can Theft be a Crime ?"

I guess the old school teachers of previous century, would have caned you on you-know-where. :-D

Please understand, senior members are hard pressed for time and at times they can feel exasperated with such questions which do sound (pardon me for this) silly.

Ideally, you should have posted this question under the "Talk To Seniors" threads and not under HRM thread; under the Human Resources Section.

And, please refrain from bad-mouthing members. CiteHR is a wonderful site for HR professionals and the members are generally very HELPFUL. Please remember, anybody who is posting his comments (whether its to your liking or not) has spent his precious time in reading your posts and responding to it.

It is OK if you can not be THANKFUL to them for expressing their personal opinion.

From India, Delhi
What happens if an individual has compulsory PF deductions at X company, he leaves this company and joins Y company where there is a facility to choose for PF deductions, he opts out of the PF at Y, can he do so?
Renuka N.
From India, Mumbai
if his salary is beyond the eligibility limit and the new company Y do not have a policy on voluntary contribution.
(In fact, it is very common in Industry. But, it does affect the pensionary benefits of the member).
However, I invite our senior members to give their opinion.

From India, Delhi
fo rclarification
I beleive firmly now that PF @12% to be deducted on B+DA if employee covers even if in case his earlier B+DA was below it.
If an employee joins from other org where he was covered under PF, then co. is bound to ask him to join PF contri and so NO OPTIONs.
If he is Fresh passed ut like MBA, IT from premier institute where co pays naturally more salary, you can opt to him join or not as this is his 1st service in life. (OPTION available)
In other all cases you have to deduct PF ( At the time of joining new co. it remain optional by the co to restrict there contri on 6500 or on entire B+DA as negotiation toll)
Mahesh Kate
From Singapore, Singapore
From India, Bangalore
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