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saswatabanerjeeOnce PF is registered for, there is no exemption or option to cancel it.
Further, once a person is under PF, he continues to be under PF even if his salary crosses the threshold.
Therefore, there is no such option where they can opt out.
From India, Mumbai
nikhil_cloudThanks, Saswata. I have 2-3 employees where there is PF but the last organization was not deducting the PF as they were not registered, so employees are asking if there is any provision for the same.
saswatabanerjeeIf an organisation has less than 20 employees, they need not register for PF and therefore they would not have pf deductions for their employees. But once you have registered, there is no option to opt out.
When the employee joins you, if his salary is above 15,000 (PF Salary, that is excluding HRA), and he has no existing PF account, he can opt for an exemption. But once he is in PF, then statutorily applicable PF is to be deducted and contributed.
I suggest you show them how PF benefits them. Once because you are contributing also, second because it is forced saving and third, it is the best interest rate they can get, and tax-free (plus insurance under EDLI)
From India, Mumbai
nikhil_cloudYes I understand the benefits of PF, but nowadays people are more to in hand. :( They want more in hand.
It is always better for your employees to continue to become members.
Apart from the benefits, Mr.Banerjee has highlighted, others are
- PF is a social security benefit
- Your employees shall become members of PF either in your company or
elsewhere where PF is covered.
- If they put in minimum 10 yrs of service, they shall be entitled to a life long pension
- They are entitled to avail Refundable Loan and Non-refundable loan depending upon
the corpus lying in PF with their individual accounts. (for Housing, Children's higher
education, Daughter's marriage etc)
Please discuss these with your employees
From India, Aizawl