Changing PF Contribution Limits: Are There Any Restrictions We Should Know About?

Dear Friends,

Since the beginning, our company has been paying PF contributions of both the employer and employee at 12% + 12% of the basic salary, even when the salary exceeds 6,500 per month. Starting from 2009, we would like to restrict the contribution to only 6,500 per month. Could you please inform us if any restrictions apply to changing this policy?

Thank you.

Hi,

No, dear, you cannot change the policy. At the beginning, you would have done that. But once you have started deducting on more than 6500, then it's over. It's one-way traffic. Hope you got my point.

Regards,
Rajeev Dixit

Dear,

For existing employees, you cannot make changes, as mentioned by Mr. Rajeev. However, for new joinings, you can adopt this policy.

Thank you.

J.S. Malik

You cannot make any changes to the existing one, but you can limit PF contributions up to Rs. 6500/- only for new employees.

Regards,
Sivadasan

Hi,

For new employees, you can start by setting a basic salary of around 50% of their total salary. In our company, we provide a minimum basic salary of 4500 and gradually increase this amount along with other components every time there is an increment. Once the basic salary reaches 6500, we adjust the amounts in the remaining components while keeping the Provident Fund (PF) contribution at 12%.

For example, if an individual's basic salary is 12000, the PF will still be calculated based on 6500 only.

Gunjan

Hi all,

I am a new joiner on this site and also new to the HR department as an executive team member of compliance. I am a student in my first year of BA (Exam in July 2009) at Kolkata University. Can I pursue an MBA alongside my BA, and if so, where? Please provide me with information.

Thank you and regards,
Uday Shankar
Email: [email protected]

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I had a query: Is there any limitation for fixing the basic percentage? Does it have to be 50% or 60%? Help me, dudes.

Vasanthpriya,

As per my information, basic cannot be more than 50% of the total salary. We used to keep it between 45-50%. Basic should not exceed 50%. HRS should be lesser than basic (less by 1-2k at least). Conveyance should not exceed 2500/pm. Also, we don't make many changes in medical allowances as one can get a tax rebate on a maximum of 18000 rs per annum (1500rs/month) as medical expenses. There is no limit on other allowances.

Gunjan

Hi all,

I have a query: what is the limit of PF deduction, Rs. 6500 or 10000 per month?

Regards,
Sujith