PF Exemption Under 80C

Dear All,
I need to know what is the statutory % contribution of the Employee and Employer towards the PF if the Basic Salary is more than 6500/-. Can the employee claim exemption for both Employer and Employees' contribution under 80C.
Also let me know if the PF deducted is 780/- both from Employer and Employee inspite of the Basic is more than 6500/-. Is it applicable?

If the salary is above Rs. 6500, statutory obligation is subject to upto ceiling limit which is equal to 6500x12% = 780.
As far as employee is concerned, his deposit and subsequent exemption under 80C is for Rs. 780 only. Employer contribution will not be treated as employee's deposit.
Abbas.P.S

Thanks Abbas for the reply. Please let me know if the employee can ask the organization to increase his contribution to the PF. Also let me know how he can do the same? Is there a possibility that the company can deny.

I would like to have the clarification on the following:
1)Is it valid when a person writes mother's name instead of father's name in the PF forms.
2)Is ESI/PF applicable to employees - like...

Dear Abbas,
The above highlighted part is wrong.
The employees can get exemption under 80 (C) for their contribution to PF upto a limit of 1 Lac p.a.
Regards
R.Ponraj

Dear Mr. Ponraj,



I don't know why you are highlighting a portion of my posting and strain to establish there is some thing wrong. Try to understand the original query.



Aditya Kulkarni has posted that even though the the salry is more than Rs. 6500, Rs. 780 is only contributed to PF. Out of these contributions (of both employee and employer), employees eligibility to get exemption is 780 or 780+780=1560? I feel that here employee will get exemption for only his contribution and answered accordingly. But do you think that as 1560x12 = 18720 which is within the limit of Rs. 1,00,000, the entire amount will be exempted from IT under 80(C)?.



i.e. for IT exemption under 80(C), two things will be considered.



1. Actual deposit made by the employee which in this case is Rs. 780 per month or Rs. 9,360 per annum.



2. Rs. 1,00,000.



Out of the above two, whichever is less will be considered for IT exemption and accordingly I responded. If you have a different opinion, be specific.



With regards



Abbas.P.S

Beyond statutory contribution (maximum Rs. 780 p.m), there is provision in EPF for voluntary contribution. Regarding voluntary contribution there is no ceiling limit, but subject to the discretion of the RPFC. If an employee wish to contribute higher amount, employer has nothing to oppose, as it is a privilege provided by EPFO. If the employer is not entertaining employees' request, you may approach the RPFC in this regard.
Abbas.P.S

Abbas and Ponraj are correct. As I understood the query from Aditya, it is:
1. PF paid from the employee (NOT by the Employer) is exempted from IT under Sec 80C. (As of now the exemption limit is Rs 1 Lac).
2. Employer is to contribute a matching amount of 12% of the Basic Pay.
3. Employee can contribute much higher, beyond the minimum 12% of the Basic Pay.
4. The exemption for IT for the employee's contribution is max Rs 1 Lac.
5. Employer must ensure that employee's Basic Pay upto Rs 6500 are registered for the PF Scheme (EPF or Trust).
Raju

Mr. Abbas is correct. The one lac is applicable for all savings like LIC, Group saving linked insurance, interest paid for HL, Principal towards HL etc. In addition upto 20,000 for long term infrastructure bond, then 25,000 for aged Dependants,plus mediclaim upto 15,000 and charitable donation upto 20,000-regards vaidya

Abbas has said the right thing, the contribution from the employee will be a maximum of 12% of Basic + DA with a ceiling limit of 6500/- per month which calculates to Rs. 780/- per month towards EPF.
An equal amount will be contributed by the employer to the employees PF Account, however the employee can claim only his PF contribution in Income Tax under section 80 (C).
The employee can further contribute towards EPF as Voluntary PF which is also exempted under section 80 (C).
As Keshav said, section 80 (C) covers various areas subject to a maximum exemption of 1 lac.
Hope the above mentioned details will clear out the confusions.
Prasanth