Understanding PF Limits: Is Someone with Wages Over Rs.6500 Eligible for PF and EDLI?

Respected Members,

I want to know the PF limits. I mean if a person's wages (BASIC+DA) are more than Rs.6500/-, is he eligible for PF? What are the deductions by the employee and employer for PF, pension account, EDLI, etc.? What is EDLI basically meant for? When can a person withdraw the amount of EDLI?

Dear Sir,

Yes, Anpat, Basic pay (Basic+DA) is more than 6500; that category employees are also eligible for their PF contribution of 12%. Suppose they would like to contribute more than 12%, it is possible to pay from their salary. In this case, the employer will contribute Rs. 780 (Voluntary restriction).

EDLI - Employment Development Linked Insurance is the payment we make to LIC. Once we are covered under EDLI, we will pay only:
- A/c No: 1 = Basic salary
- A/c No: 10 = 8.33%
- A/c No: 2 = A * 1.1%
- A/c No: 21 = A * 0.5%
- A/c No: 22 = A * 0.005%

Hope this is clear to you.

If an employee's basic salary is more than Rs 6500, then PF will not be deducted. But if employees want the deduction of PF, then the employer will not contribute. The deductions are as follows:

Employee | Employer
---------|----------
A/C 1 Employee & Employer Contribution | 12% | 3.67%
A/C 2 Administration Charges | - | 1.10%
A/c 10 Employee Pension Scheme | - | 8.33%
A/C 21 Employee Deposit Linked Scheme | - | 0.50%
A/C 22 Inspection Charges | - | 0.01%
Total is 25.61% of the employer and employee's money will be deposited in SBI Bank.

Hi Anpat,

Basic Pay (Basic + DA) is more than 6500, employees are also eligible for PF contribution of 12%. The central govt announces a wage ceiling of 6500 because it is the limit to the employer pension amount for employees. For example, employees with basic pay below 6500 receive 8.33% of basic pay as a pension amount every month, while employees with basic pay exceeding 6500 receive only Rs. 541 as a pension amount, with the remaining amount going to the provident fund account.

EDLI stands for Employee Deposit Linked Insurance. Employers contribute 0.5% of the basic pay every month to EDLI. This is useful only for the employee's nominee, not for the employee directly.

If you have any doubts or suggestions, email me at india.srinu@gmail.com.

Regards,
Srinivas.

Hi Srinivas,

Basic Pay (Basic + DA) is more than 6500, employees are also eligible for PF contribution of 12%. The central government announces a wage ceiling of 6500 because it is the limit to the employer pension amount for employees. For example, employees with a basic pay below 6500 receive 8.33% of their basic pay as a pension amount every month, while employees with a basic pay above 6500 receive only Rs. 541 as a pension amount, with the remaining amount going to the provident fund account.

EDLI stands for Employee Deposit Linked Insurance, where the employer contributes 0.5% of the basic pay every month to EDLI. This insurance is useful only for the employee's nominee, not the employee directly.

If you have any doubts or suggestions, please email me at india.srinu@gmail.com.

Regards,
Srinivas

Dear Sir,

Yes Anpat, if the basic pay (Basic + DA) is more than 6500, employees in that category are also eligible for PF contribution of 12%. If they wish to contribute more than 12%, they can do so from their salary. In this case, the employer will contribute Rs. 780 (voluntary contribution).

EDLI, which stands for Employment Development Linked Insurance, is the payment we receive from LIC. Once covered under EDLI, the contributions are as follows:
- A/c No: 1 = Basic salary
- A/c No: 10 = 8.33%
- A/c No: 2 = A * 1.1%
- A/c No: 21 = A * 0.5%
- A/c No: 22 = A * 0.005%

I hope this is clear to you.

Regards,

Mathangi