Is It True That No PF Deductions Apply for Salaries Over Rs. 10,000? Can I Still Opt In?

Hi, can anyone help me? I have joined a new company, but there are no deductions in my salary towards PF contribution. When I asked about that, the company explained that there is no need for PF for people who earn more than 10,000 per month. Is this true? Is there any way I can be eligible for PF? Thanks in advance.

Hi.. can anyone help me? I have joined a new company, and there are no deductions in my salary towards PF contribution. When asked about that, the company explains that there is no need for PF for people who earn more than Rs. 10,000 per month. Is this true? Is there any way I am eligible for PF? Thanks in advance.

I may enlighten you that employees drawing a salary of Rs. 6,500 or more are excluded employees. The employer is under no obligation to make them members of the contributory provident fund. However, it is open to the employer to make employees drawing a salary over Rs. 6,500 per month and restrict the employer's contribution to Rs. 6,500, and matching contributions can be made by the employee also.

Hi,

I would like to shed some more light on the issues.

The ceiling for PF contribution is the basic salary of Rs. 6500 per month, not the gross one. If your basic salary exceeds the ceiling of Rs. 6500, then it is optional for you whether you want to be a member or not.

I hope it is clear to you now.

Regards,
Amit Seth

The salary eligible for contribution to the provident fund is the basic salary plus the Dearness Allowance, if admissible. If the total sum of the two is over Rs. 6500.

My understanding is that if all employees at the firm earn more than $7500-$8000, then there can be an option to opt out of PF.

Hi all,

I would like to shed some light on the discussion about PF. PF is applicable to a person earning their basic salary below 6500; otherwise, it depends on the employer and employee discussion when deciding the CTC structure at the time of the interview/appointment.

The issue here is that your salary is 10000, which is above the applicability threshold. Therefore, PF is not applicable to you. If you wish, you can request your employer to rearrange the CTC structure to include PF contributions.

Regards,
Yogesh

Hi,

There is no prohibition under the act to contribute for PF up to the wage ceiling of Rs. 6500/- irrespective of the salary exceeding 6500 or more.

GK

The statutory limit is Rs. 6500/- per month. The employees drawing a salary of Rs. 6500/- are to be made members of the CPF as an obligation on the part of the employer. Beyond this salary, up to any limit, as per the provisions of the act, it is a voluntary action. The contributions to CPF are made with a view to inculcate the habit of saving for old age and providing for other specified exigencies. It is a much sought-after way of saving and tax planning, as contributions to CPF are entitled to a rebate under Section 80C of the Income Tax Act, 1961. It is for this reason that more and more companies, in the welfare of their employees, are even voluntarily making them members of the CPF.

Deepak Thukral

Hi,

Dear Friend, any employee drawing a basic salary of more than Rs. 6500 per month can be excluded from the PF benefits provided by the company. It all depends on the employer's wish. If the employer wants to provide this facility to employees as a motivational factor in the bracket of employee care and compensation, then it is very much possible. Only the employer can make the decision - yes or no.

Thanks,
OMPARKASH

As far as my knowledge is concerned, if your salary exceeds Rs. 6500/-, the P.F. is deducted only on the basis of BASIC + D.A. (DEARNESS ALLOW.), i.e. P.F. able salary. It is not mandatory, but obligatory as the P.F. Act is made for the Social Security of the employee to deduct and contribute employers' share @ 12% on Rs. 6500/- and remit it to P.F. Authority by challan.

Regards,
Vipul

Hi, the deduction of PF depends on the organization. In my case, I am receiving a salary close to 20k. My deduction is Rs. 890, and the same amount is contributed by the company. I hope this clarifies things for you.