Regarding Ceiling Limit For PF Deduction - CiteHR
Statutary Consultant
CA Darshan Balai
Chartered Accountant
+1 Other

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Dear Friends,
If the contractor engages a "Skilled Professional" with a salary of Rs.12,000/- per month, whether the contractor is required to deduct PF on a ceiling of Rs.6,500/- or can he be exempted from PF deduction??
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Dear Ankur , In this situation employee will choose regarding pf deduction on 12500 or 6500 or exempt from it but firstly we have to know that above 12500 is gross wages or Basic + DA
Thanks Kishorji. Rs. 12,000/- is Basic + DA. However, in such case, if the enforcement authority pressurizes for PF compliance, is it legally tenable? Regards, Ankur
Dear Ankurji, Yes it is right and perfectly compliance under pf act.
Dear KishorJi, My Gross Salary is Rs.21000/- .Please tell me how much should i pay for PF and ESI....? Please guide me in this regard.
As per the provisions of the Act -
An employee drawing a salary(Basic+DA) over the basic exemption limit of Rs.6,500 is excluded from the coverage of the Act, provided he is not the member of the fund. In other words, if he was not a PF Account holder in any of his previous employment, then he need not comply with PF formalities in your establishment. However, for administrative compliance, you can take a declaration from the employee to that effect - that he was not a member and that he is not willing to pay PF Contribution.
Hope that helps!
Mr. Mohan,
Referring to my previous comment above, you are not liable to pay PF , if you were not a member in your previous employment. However, you may opt for PF compliance on a basic amount of Rs.6500.
Under ESI, you are an exempted employee as your gross salary exceeds the maximum limit of Rs.15000. Hence, you are not liable to pay any ESI contribution
Hope that helps!
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