John Varghese

I understand that HRA and Conveyance allowances are not included in calculation of employee / employer contribution towards PF. But is it considered when calculating the gross pay for PF cut off limit of 15,000?
For example, consider the following salary
Basic = 8,800/-
DA = 4,400/- ( 50% of Basic)
HRA = 5,280/- (40% of Basic + DA)
Conveyance Allowance = 1,600/-
Gross Pay = 20,080/-
Here Basic + DA is 13,200, which is below 15,000. But gross salary is above 15,000. Is it mandatory to contribute to PF for this employee?
Also, is PF applicable for interns/apprentices?

From India, Kottayam

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hi john,
pf is calculated on the basis of (Basic + DA) only, gross salary is not related to pf.
The company can provide pf, even if (Basic + DA) is less than 15000 and its gross is above 15000
note:-pf criteria
If (Basic + DA) is less than or equal to 15000, then the employee is eligible for both EPF and EPS contribution.
If (Basic + DA) is greater than 15000, then the employee is eligible for only EPF and EPS is not eligible.

From India, Pune
John Varghese

Thank you Rajeshwari. I just came across the new Supreme Court judgement (and an excellent evaluation of the verdict and its impact by Madhu TK), which does indeed clarify the above query. It appears we have to include Conveyance allowance also.

From India, Kottayam

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