Understanding PF Deductions: Which Salary Components Apply in Tamil Nadu's Manufacturing SMEs?

All,

I would like to clarify if there is any act or guideline to state how the salary split components should be for Manufacturing SME Industry in Tamil Nadu.

My primary query here is: should PF deductions be considered for what salary component; is it only Basic or any other heads also?

Thanks,
Nitya

Wages for the calculation of PF are equal to 12% of Basic + DA + RA (Retention Allowance), up to a maximum of Rs. 6500/-.

Thank you.

PF Contribution Components

Components for PF contribution include Basic, DA, and all other allowances, including monthly incentives, except HRA, OT, Bonus, and allowances for Washing, Food, and TA. This is subject to the ceiling of Rs. 6500. This information is provided by the PF Office. Although the Act stipulates that the contribution is on Basic + DA + Retaining Allowance, PF Officials insist on the above-mentioned components to bring the wages up to Rs. 6500.

Regards,
Usuf Chennai

16 May 2013