Pay More For PF, Take Home Lower Salary Every Month (Times Of India Dated 11th December, 2012) - CiteHR
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Thanks for info
Here is the link to check the pf related issue as on 30th nov 2012 regarding clubbing of all allowances into basic salary.
Forcing workers to divert more of their salary to the provident fund is wrong - The Economic Times

(b) “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either
case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-
(i) the cash value of any food concession;
(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the
cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in
respect of his employment or of work done in such employment
But in the notification only Discussion about Commission & any other similar allowance. Means if company are paying House rent allowance, Overtime allowance , it will be not come under PF deduction, If company give any other allowance than it will be come unde PF deduction.
Am I right ? Please reply

This report on PF increase is apparently misleading and can create tremendous amount of confusion.

I don’t think these instructions are going to affect the employees who are getting salary above Rs. 6500/-p.m. because as per existing PF Law only people with the basic +DA or purely basic not exceeding Rs. 6500/- p.m. are covered by the scheme and employees joining above Rs. 6500/- as basic or basic +DA are exempted from PF.

Employees joining at a lower level eligible for PF will continue to get PF up to Rs. 780/- or 650/- (as the case may be) and further increase is not subject to the PF deductions.

In many establishments, the salary is sub divided into smaller basic, no DA and other allowances for various reasons one of these may be just to avoid PF contribution. This circular/ instructions will help such type of employees, and such employees will get an increase in PF till they reach the limit of Rs. 6500/- total basic.

It is further may be noted that there are some organizations which are giving PF contribution even on above the amount of salary above Rs. 6500/- also, the wording of the circular are not much clear on this account, as such it require a further clarification from the PF Organization.



Savings is always good. But not the at the cost of present take home wage. In the present family set up one should have some protection financially once they become old.
Thanks for this nice updation but in my view to cover all allowances for EPF deduction is really a matter of worry since SLP of Surya Roshni vs RPFC Gwalior is still pending before Hon'ble supreme court of india.How can RPFC can take decision on the sbjudice matter is it not a contempt of court.
Thanks & Regards,
Sumit Kumar Saxena

If you go through point no.12 of the circular, it shall be observed that Central Commissioner has himself agreed that there is a confusion in the definition, which can be rectified only by the legislature and not by Central Commissioner. Also note that the said subject matter is sub-judice and it is pending before Supreme Court and outcome is awaited. In my view, necessary initiative should be taken after the final decision of the Supreme Court.
Kuldeep Singh

Dear all Why PF is so silent on this matter. It is not coming out with a clear picture on what are all the allowances treated as part of basic wages and contribution must be deducted.
Dear All,
My question is as Section 2(f)(ii) of The Employees’ Provident Fund Scheme, 1952- it excludes employees whose pay is greater than Rs.6,500/-. If pay here means gross salary then most of the employee will come under excluded employee list.
To me there is some misunderstanding in context with the explanation made. I think, we should wait for the official clarification in this matter.
Vivek Sang

I happened to have an opportunity to discuss the matter with a senior authority of the EPFO.
There is lot of queries / objections received by the department and the matter is in their active reconsideration. It is being proposed that instead of clubbing of allowances they may fixed minimum amount of contribution on the basis of 6500/- without taking into consideration what is the actual amount of salary this may meet the purposes for which the circular was made. It means even if the wages are less than 6500/- amount of PF contribution be calculated on a notional salary of Rs. 6500/-
This is still a proposal under consideration and not any final outcomes. Let us wait for final verdict.

In continuation of my above mail….
In the new proposal exclusion of the employee is also being proposed to be abolish and every employee proposed to be a member of PF even if the salary is above Rs. 6500/- but contribution may be restricted to Rs. 6500/-
But I don’t think such a proposal can be implemented without amendment in the Act.

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