Dear all, I am working for a shopping mall where most of the employees are covered under epf and their wages are <15000.
As of now,we are deducting their epf on basic of 40%. As per new supreme court order, we have to pay the EPF on all the allowances except few. Can i show 40% basic plus 60% hra so that no need of deducting EPF on total wages. or is there any other way as our employees are also not interested to deduct pf on total wages.
please advise.

You can get exemption of HRA portion only if you give it as a separate allowance. Say if your employees are residing in rented houses, and you pay their rent, this is HRA. The HRA that you say is part of salary only. That also higher than basic salary. If you pay 100 rupees as wages, it is meant for his roti, kapda and makan. You are saying that he should eat less,spend less on clothing but live in Mansion?
Why don't you contribute it on the entire salary? After all how much it will come? Make it restricted to Rs 15000 in the case of those having more than Rs 15000 as gross salary.

From India, Kannur
Dear madhu garu,
thank you so much for your valuable reply and response. we have conveyed the employees and explained all the advantages. but, they do not want more PF to be deducted. sir, please clarify the following :
basic : 14000
hra : 5600
conveyance :5600
other allow : 2800
in this case whether we have to calculate the epf on 22400 or can i make restriction upto 15000.
basic : 10000
hra : 4000
conveyance :2000
other allow : 1000
in this case whether we have to calculate the epf on 13000.
please advise.

In the first case, you can restrict the PF contribution to 12% of Rs 15000. For that you have to add one more column in your pay roll by name,PF qualifying salary or PF contributing salary and on that apply the formula.
In the second case also, you have to go for Rs 15000. But considering that HRA is exempted, (though it is that HRA will is paid to eligible employees and not all) you can defend if you pay it on Rs 13000. Anyway that is higher than the basic salary that you have fixed and that is fair enough.

From India, Kannur

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