Understanding PF Calculation: Can I Use Rs. 6500 as the Basic Salary Limit for Deductions?

The maximum limit for the calculation of PF is Rs. 6500/-. However, currently, PF is being calculated based on the actual basic salary, which is Rs. 7500/-. Can I begin calculating the PF deduction by assuming the basic salary as Rs. 6500/-?

Please advise.

Dear [Name],

Your assumption is not correct. For the provident fund, the maximum limit for the basic is 6500. If the basic salary exceeds this amount, employees are considered exempt.

This legislation is beneficial, and once you have started calculating based on 7000, you cannot reduce it.

Thank you.

J. S. Malik

Dear,

Have a nice day.

P.F. Max. Limit as per law is 6500/-, but based on the actual basic of 7500/- of the employee, you deduct P.F. on the actual basic. Then you fill out a higher rate permission letter; otherwise, you deduct the max. limit of 6500/-

With warm regards,

Paresh M. Vyas
Advocate & Labour Laws Consultant (M)
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Dear,

During the coverage of your establishment under the PF & MP Act, your employer might have submitted a letter to PF authorities intending to deduct PF on the salary more than Rs. 6,500/- and to pay administrative charges on such higher salaries. Only then can you deduct PF on higher salaries. Once you have started deductions on higher salaries, you cannot reduce them afterwards. Otherwise, employees drawing a salary of more than Rs. 6,500/- per month are considered excluded employees.

Thanks & Regards,
Manoranjan

Dear All,

There is no harm in changing or altering the service conditions with specific notice served on competent authorities as well as the employees as per the statutes. So, even if you have been deducting PF for basic pay exceeding Rs. 6,500, you can serve notice of the change in service conditions appropriately to the concerned parties and the competent authority and begin implementing the change after the stipulated time. The PF Commissioner and the Labor Commissioner of the State or Centre, as the case may be, must be notified.

The maximum limit is stipulated in the PF & MP Act. Even for exempt employees, deductions for the full basic pay can be made with a consent notice from the employer.

Regards,
Gopan

Hi everybody,

Please know about the syllabus and sample paper for HR Trainees of Power Grid Corporation.

Dear friend,

I have implemented the change of limiting the PF contribution on the basic of Rs. 6,500/-. Prior to my joining the organization, the employees were covered at 12% of the basic (actual). Upon increments, I realized that most employees prioritize their take-home salary over PF savings. I suggested to the management to create two categories of employees: managerial and non-managerial. Managerial cadre with 12% of the actual basic (to account for Income Tax under 80 C) and non-managerial with a PF limit of Rs. 6,500/- or the actual amount, whichever is less (to enhance take-home pay without affecting the agreed CTC package). During one of our bi-monthly staff meetings, I obtained the staff's consent and personally met the Regional PF Commissioner to seek approval for implementing this change. This scheme is currently running smoothly. I have greater leverage during salary negotiations/increments, and employees are pleased that their take-home pay is more attractive. It's a win-win situation.

Regards,

Bhavan

I have a query regarding VPF. If the employee wants to contribute more than Rs. 780/-, does the employer need to take any written document from the employee, or do we need to submit any document to the PF office? Now that we are using e-sewa, is it still required to submit any documents?

I am unable to see the e-passbook of individuals. Is this problem only for our organization, or are all other company members also unable to see their e-passbooks?

Thanks & Regards,
Sheela