Hi Srikanth,
I think your question is how to understand PF slip received from PFO to explain to your employees. First of all, please know that the PFO maintains a ledger for every PF account similar to a bank account. Credits and debits are posted every month in this ledger. While credits that occur before 5th of the month are eligible for interest calculation in that month, debit even on the last day of the month is not eligible for the interest in that month. PF slip captures the gist of the ledger (OB, total of credits, total of debits, interest calculated and CB).
I am attaching a model PF ledger, which is self explanatory. The gist of transactions for the PF slip are shown at the end of the attachment.
The essence for you to know is that "interest bearing balance" (IBB) is calculated every month, total is struck at the end of 12th month, and average IBB is calculated by dividing the total by 12. One month's interest @ prevailing rate (9%) is calculated on this average IBB. If you have details of credits and debits, you can create a ledger and verify whether the interest shown has been calculated correctly.
Hope this will suffice.
Regards,
K Raajaram