Understanding PF and ESI Deductions: Are They Applied to Encashment of Earned Leave?

Dear friends,

Is PF & ESI deducted on encashment of EL?

Regards,
Sudhir

Dear Sudhir,

Yes, PF is payable on EL encashment. ESI deduction is not required.

Regards,
Abhishek

Dear Sudhir,

Abhisek is correct. In fact, there are judgments stating that PF has to be deducted for EL.

Regards,
Ponnu

Yes, the PF has to be deducted for EL Leave, whereas it is not mandatory to deduct ESI.

Regards, Sheila

Hi Abhisek & Ponnu,

It is correct that you have to deduct PF for the encashment of leave. The calculation should be ((Basic + CLA/CCA/DA) * No of EL)).

Kugan Paramasivam.

Dear All,

The above is correct. Please check this attachment.

Thirumalesh Kumar

Leaves encashed on separation are not liable to the PF. Can anybody provide a copy of a judgment from any court regarding the same? The attachment above is the representation made by the PF Department.

Maximum leaves that can be accumulated are 300 in general Departments of the Government of India. Some other organizations also adopt this procedure.

Dear Friends,

PF & ESIC are not applicable on encashment of leave. The final judgment has been received from the Supreme Court. If anybody requires a copy of the circular and judgment, please contact me at [Login to view].

Arihant
(094288 21736)

Dear Mr. Arihant,

I am Vimal Radia, GM Administration of Bell Granito Ceramica Limited in Vadodara, Gujarat.

I kindly request you to email me a copy of the circular and judgment regarding the deduction of PF from EL encashment. This would help clarify any speculations.

Regards,
Vimal Radia
0 96625 48601
[Login to view]

I hereby attach the circular and SC Judgment for your reference. No PF deduction on leave encashments when full and final settlement.

Regards,
Muthukumar PS
Advocate
[Phone Number Removed For Privacy Reasons]
Coimbatore