Seeking Clarity on PF Exemption Limit: Can Anyone Share the Official Rule or Notification?

Dear All,

I have seen many threads discussing the exemption limit of 6500 beyond which there is no compulsion for the employer to pay the prescribed percentage on basic+da. Can someone provide me with the notification/circular/rule where this is mentioned?

Thanks in advance.

Varadarajan R

Hi,

I am seeking a birthday format to communicate with everyone in our organization. Please help.

Regards,
Hari

Thank you, Mr. Chellappa, for the email. If I understand correctly, while the maximum limit for the purpose of computation of contribution is 6500, the following points are my understanding.

01. This does not exempt employees above 6500 from PF when it is a covered establishment.
02. If an employee above 6500 wishes to contribute at the prescribed percentage on his eligible salary, it is voluntary for employees, which is to be documented, but there is no compulsion on the part of the employer to match such voluntary higher contribution.

Your guidance on this would be highly appreciated.

Varadarajan R

Dear Mr. Varadarajan R.,

Please refer to Justice Samant Labour Law, published by Labour Law Agency in Mumbai. You will find all the primary information on labor law.

Pramod Pandey

Above 6500, the employer can deem the salary paid (Basic + DA) to be 6500 and pay contributions accordingly. If the employer opts to pay more, the employer need not pay anything extra from his pocket. However, the employer, at his own discretion, may pay any higher amount. Excluding an employer from the PF ambit as his wages are above 6500 (Basic + DA) is not warranted.

The Vellore and Chennai PF offices mentioned once that employers above 10000 Rs (Basic + DA) need not pay any PF. However, I have not cross-checked this rule as of now, as I am out of payroll processing.

Hi all,

Actually, I'm still confused.

Means:

A) 1. If a person getting a salary of Rs. 8500/- as basic is covered for PF... Yes/No. 2. If a person getting his basic as Rs. 18500/- is covered for PF... Yes/No.

B) If a person is getting a basic of Rs. 8000/-, will the PF be deducted on Rs. 6500 or on Rs. 8000/-? If a person is getting a basic of Rs. 18500/-, will the PF be deducted on Rs. 6500 or on Rs. 18500/-?

C) Rs. 6500/- is the pay scale. If the employee receives above this pay scale, the company will pay him PF, and he is also entitled to the same... Is it true?

Thank you very much in advance for your expert suggestions.

Ruchi Tyagi PF scheme