Partner - Risk Management
Management Consultants Legal & Hr
Sr. Hr Manager
Practising Advocate (taxation Laws)
And also for commission paid on profit to directors ?
Are they exempt from PF as not being salary ?
20th July 2014 From India, Mumbai
1. Yes, it is applicable to Director as per Pf act “employee” means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer. It includes any person - (i) employed by or through a contractor in or in connection with the work of the establishment.
2.An employee who is drawing ‘pay’ above prescribed limit (presently Rs 6,500) can become member with permission of Assistant PF Commissioner, if he and his employer agree. [para 26(6) of EPF Scheme]
21st July 2014 From India, Mumbai
The Executive Directors who are looking after day to day activities of the company and who are directly in the pay roll of the company drawing salary like other employees per month, those Directors are the employees of the company under defination of the PF Act . So it is compulary on the part of the company to deduct PF contribution in accordance with the PF & MP Act as applicable.
Other Directors who do not receive salary / wages from the company are excluded from PF & MP Act. Normally they receive sitting fees for attending board meeting, reimbursement of hotel expenses for staying, commission etc as prescribed under Companies Act.In other words, they are not the whole time Directors of the company.
29th July 2014 From India, Calcutta