Dear Friend
Yes, there is a ceiling limit of 6500 on basic salary.
According to my knowledge if the employees basic salary is Rs. 16,000/-
Then the contribuions are like this
Employee contribution is 16,000*12%= 1,920.00
And the Employer contribution (12%) is divided into 2 parts.
8.33% of basic salary (8.33% * 16,000 = 1,332 goes to the Pension Fund.
3.67% of 6500 (Rs. 238) goes to the P.F.
I'M ALSO VERY CONFUSED ABOUT THIS.
IF I'M WRONG PLEASE LET ME KNOW.
REGARDS,
K. Ravi Kumar.
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Ph: 09989111149