Is PF Deduction Applicable on Leave Payments? Seeking Latest Gazette or Notification

Hi everyone,

This is Sohail, and I want to know if PF deduction is applicable on leave payment or not. If not, can anybody send me the fresh gazette or notification of it, please?

Thanks.

Earlier, PF was applicable on leave encashment as per a circular of the Labour Ministry. Now, after a ruling of the High Court, it has been withdrawn, and PF is not applicable on leave encashment.

This is for your kind information, please.

Thanks & Regards, Avika

Avika, you are correct. As per the Supreme Court order dated 12.03.2009 in the Manipal Academy vs. CPFC case, PF is not required on leave encashment.

PF is not deducted on leave encashment. According to the Honorable Supreme Court, it is not a part of wages.

Hi all,

As per the Supreme Court judgment dated 12.03.2009 and the clarification provided by the Provident Fund Commissioner on 06.07.2008, it has been stated that PF should not be deducted from Leave encashment wages as it does not constitute the basic wage of the employee.

I have attached the clarification issued by the Regional Provident Fund Commissioner for your immediate reference and records.

Mohan Rao
Manager HR

Hi dear all,

As it is correct that there will be no PF deduction on leave encashment when it is a service benefit for an employee, such as in the case of resignation, retirement, or termination. However, it will be deductible when anybody encashes their leave while they are in continuation of service.

Regards,
Sandy

DEAR ALL,
WITH REFERENCE TO THE QUESTION ON P.F. DEDUCTION ON LEAVE SALARY, THE FOLLOWING IS THE SUPREME COURT JUDGEMENT.
?Encashment of leave will not attract Provident Funds contributions since the definition of ‘basic wages' given under the Act did not intend to include such type of payment besides that the Apex Court in Bridge & Roof Company (India) Limited has also clearly interpreted the term ‘basic wage' hence the reliance as placed by the EPFO on the judgment of Bombay High Court has not been proper.

REFER THE FOLLOWING JUDGEMENT:

Hi Preethi,

Please post your query in a new thread. They are discussing something else, and you are interfering with an altogether different subject.

Thank you.

As per the directions of the Hon'ble Supreme Court, PF is not applicable on Leave encashment. As far as ESI is concerned, it is also not deducted on leave encashment.

Regards