Can Companies Legally Set a Higher PF Ceiling Than Rs. 6500 for Higher Salaries?

It has been widely observed that companies put Rs. 6500/- as the upper limit for giving PF on basic salary.

My question is, can we set the ceiling for PF at Rs. 10,000 or any amount over Rs. 6500 but less than the actual basic salary for employees whose salary is above Rs. 6500/-? Is it legal?

Rolly

Hi Rolly,

As per the provisions of the Provident Fund and Miscellaneous Provisions Act, those employees who have been drawing a basic salary of up to Rs 6500/- have to be included under PF. However, you can also include those employees whose basic salary is above 6500/-, but if an employee is already a member of PF and his/her basic salary crosses the limit of Rs 6500/- due to an increment, he will continue to be a member of the PF until the time he is on the payroll of the same company. As far as the ceiling is concerned, it is 6500/-. You can't raise it as per your wish. Either it should be 6500/- or the actual basic salary, whatever it is.

Amit Goyal