Dear Seniors,
I would like to know if the director of a Pvt Ltd company is liable to make contributions to pf?? Is there a salary limit for the same?? If the Director is exempted from making contributions, is there a reference to the same in the act??
Kindly share your knowledge / expertise on the subject matter and help me in this issue.
Thanking you,
Roopa

From India, Bangalore
I am reproducing relevant portion of the Patna High Courts Judgment in Union Of India vs Patna Tyre House Pvt. Ltd. delivered on 2nd December 2003

"From the discussion aforesaid, I am inclined to take a view that the Director although getting remuneration shall not come within the definition of employee and the natural corollary of the same is that they shall not be counted as employees for calculating the employees strength. The view which I have taken finds support from the judgment of the Calcutta High Court in the case of Sanatan Ghosh (supra).

13. Undisputedly if the directors are excluded from the strength of the employees, the establishment is employing less than 20 persons. That being the position, the establishment is not covered under the provision of the Act. Hence the Tribunal did not commit any error in passing the impugned order,"

From the judgment quoted above, it is very clear that Directors appointed under \The Companies Act for the Board will not be covered and no deduction need to be made for them.

However, many companies cover their Directors for PF and specify it in the conrtractual terms.

Please note that there are instances of designated Directors who are not Board Directors. They will be counted as employees and if their salary is lower than Rs 6500/( which is unlikely) they shall be covered

From India, Chennai





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