Opting Out of PF: What Steps Are Needed for Employees Earning Over Rs. 6500?

I would like to know whether an employee who joins with a base salary of more than Rs. 6500/- per month and wishes to opt out from the P.F., not wanting to be a member of P.F., can do so. What formalities need to be done? Are there any forms available that need to be submitted to opt out? If so, what are the formalities that need to be completed?

Please guide me.

Regards,
Vipul Rana

Dear Both,

Simply use Form No. 11 (exemption form), which can be downloaded from the PF site.

Regards,

Hi dear,

As per our telephonic discussion, please use Form No. 11 (exemption form), which can be downloaded from the PF site. Also, kindly do the needful as per company laws.

Thank you.

A ceiling wage of ₹6500/- has been decided. If any employee has a basic salary of more than ₹6500/-, then it is not mandatory to deduct their PF. There is Form No. 11 as decided by the EPF Act of 1952 for those who do not want to deduct their PF. It is called VPF (Voluntary Provident Fund).

Regards,
H Garg
Human Resource
Bawal, Japanese MNC

Most companies deduct as per their company norms. They hardly give the opportunity for the employee to decide and settle on his/her choice. VPF is good but rarely it is implemented.

Dear Friends, thank you for your advice. After reviewing Form-11, I found that this form is specifically for employees declaring their employment in the establishment. I did not find this form relevant for the exemption. I have enclosed the form for your review.

Details on P.F. Deduction

Going into details, I would like to know if it is compulsory for an individual to have P.F. deducted on Rs. 6500 and above, or if they can choose to be a part of it or not.

Regards,
Vipul

If you are not a member of PF in your earlier company, you can opt for an exemption for PF contribution by filling out Form 11 with your present employer. This form must be submitted by your employer to the PF commissioner.

Regards,

C.S. Deshmukh
HR Executive

Dear All, I want to know about some points related to PF.

PF Pension Commutation at Age 34

1. An employee who has completed 10 years as a member of PF and leaves the job wants to commute his pension immediately; his age is 34 years. Is it possible? Or is it possible only after the age of 60 years?

Withdrawal from Pension Fund

2. How much amount can he withdraw from the pension fund 8.33%?

Pension Calculation Formula

3. What is the formula for calculating the pension?

Please reply soon or by mail [Email Removed For Privacy Reasons].

Dear Rajiv,

Since the employee has served for 10 years, he is entitled to a pension but not before the age of 50. Currently, only the Provident Fund (PF) can be withdrawn, not the pension share.

Regards,

Hi folks,

I work for the Provident Fund organization. You may address me as 'PFwala'. I just chanced upon your queries. If you still have some queries related to EPF/EPS, please post them. I'll try to provide information or clarification as soon as possible.

Best,
PFwala

Dear All,

Kindly tell me the meaning of Voluntary Provident Fund and exactly how its calculation works.

Regards, Kamesh OB Executive

Dear Shri Vipul Rana & Shri KK,

If you opt out of PF, you would be losing the equal management contribution to your account as well as the pension benefits attached to the PF. So, I suggest you please reconsider your decision. You would be saving somewhere else for income tax purposes. Then why not in PF?

Sincerely,
Shyam Agrawal

Dear Sir, I am an accountant in a private limited company, and we are facing some confusion regarding the PF registration process. In our company, some employees are reluctant to register for the PF membership, which is causing difficulty in registering other employees as well. What would be the next step in this situation? Can we seek exemption for employees who do not wish to avail of the PF facility?

I am awaiting your response.

Thanks and regards,
Uday

There are no forms to be filled out to get an exemption for employees. If your salary (Basic+DA) is over 6500/- per month, you can also request your employer to exempt you from PF.

Regards,
Venkateswaran

Understanding PF Membership and Form 11 Requirements

As per the PF laws, the employer is required to get Form 11 duly filled in by the new employee. From the details of the said form, the employer comes to know whether the new employee is a member of PF or not. If the new employee is not a member of PF on the date of his joining and if he is drawing more than Rs. 6,500 as basic and DA, then it is not necessary to deduct PF.

However, if the employee is already a member (i.e., if he has not withdrawn his PF before joining the new employment), then it is compulsory on the part of the employer to continue with his membership by deducting PF on Rs. 6,500.

I need information on the same issue. Some of my clients (employed with company X in Delhi/NCR) have been working for the last 2-3 years. They are now doubtful whether the company is depositing the PF contribution regularly, even though it is being deducted from employees' salaries.

We have doubts because when one employee left the organization and wanted to withdraw the PF, the PF department rejected the form, stating that they do not have a record of the contribution from the employer. Is this not a crime? Deducting PF and not depositing it with the authorities.

Actions for Ex-Employees and Current Employees

What action can be taken by the ex-employee? What can current employees do to safeguard their money and avoid being cheated? Whom should they approach regarding this issue? Since the company is not providing the information, what steps can be taken?

Regards,
for

Could somebody guide me on which option should be chosen in Form 11 if the person is not opting for PF? If a person does not want to opt for PF, does the company have legal implications for it? Is a PPF account a better option if someone wants to quit from PF?

Regards,
Neha
Sr. Executive-HR
Allied Lemuir

Dear Members,

Just follow PF rules; it is compulsory to deduct PF up to a basic + DA (if any) of ₹6500 per month. Employers need to deduct PF for any employee up to ₹6500; anything more than that is optional. However, once it is deducted, neither the employer nor the employee can withdraw or stop it.

Ways to Confirm PF Contributions

To confirm whether PF contributions have been deposited or not, there are several ways to verify it. Firstly, ask your employer to provide your individual PF account number. Secondly, request the PF slip, which is issued by the PF department annually to employees whose PF is being deducted. Thirdly, confirm with the bank where the deposit challans are being submitted. Lastly, for further clarity, approach the PRO at the PF office.

Regards,

Dear Vipul,

You will find the provision of exemption from EPF under Para 2 (f) of the Employees' P.F. Funds Scheme, 1952. However, it is important to note that only new entrants whose basic salary or wages (basic + DA) exceed Rs. 6500 can benefit from this provision. Old employees who are EPF members and exceed the Rs. 6500 salary limit due to increments should not be excluded from the scope of the act; they will remain members, and PF deductions will be based on the ceiling of Rs. 6500. Additionally, those who have withdrawn their PF upon reaching the age of superannuation or are older than 55 also qualify for the exemption. Form 11 is typically used for previous EPF/EPS details and not for exemption purposes.

Hope you understand the provisions.

Regards,
KIRAN KALE.

Form 11 and Its Significance

Form 11 is a declaration form in which details are provided about the previous P.F. number, indicating whether the employee was a member of P.F. in previous companies. If the employee was part of P.F., it is obligatory for the present employer to deduct the P.F. of the same employee up to Rs. 6,500, even if the basic salary exceeds Rs. 6,500.

Form 26 (6) and Employer Contributions

Form 26 (6) is filled out by employees whose basic salary is more than Rs. 6,500, and acceptance is given by the employer on the same form. In this case, the employee can benefit from P.F. contributions, but the employer is only liable to contribute up to Rs. 6,500, not more than that.

Regards,
Rajiv Singh