Exempting Employees from PF Coverage: Is a Self-Declaration Enough If They Have a PPF?

Can we exempt an employee from the coverage of PF if he/she submits a self-declaration stating that he/she does not want the PF coverage since he/she is maintaining a PPF account? If so, how do we justify this?

It is not possible to exclude him for being a member of a PPF account. He can be excluded when he is drawing a Basic Salary of >6500 and he is not a member of EPF before.

Regards,
S. Sethupathy

We'll still have to pay the PF employer contribution for a maximum of ₹6,500, even if the employee is earning more than ₹6,500 per month, isn't it?

Thank you, sir, for the value added. One more submission in continuation to the above. I have come across a few cases of individuals who are not covered under PF after submitting the self-declaration, and whose Basic is more than Rs 6,500/- per month at the discretion of management.

Regards,
Ujjal

EPF & MP Act, 1952 Coverage

The EPF & MP Act, 1952 covers the whole of India except the state of J&K. In the PF Act, the explanation of an employee is detailed below:

"Contract labour is included, but casual labour is excluded for counting the strength of employees. An apprentice is only a learner and not an employee. Trainees cannot be taken as employees. Sweepers and chowkidars drawing paltry sums per month and not borne on the regular staff sheet are to be excluded from the employment strength. Directors, working partners, managing partners, domestic servants, and contractors are not employees. The onus of proving employment strength is on the establishment. Change in ownership is immaterial for the applicability of the Act. Composite factories come within the purview of the section."

Hence, an employee has to be necessarily covered under PF, even if their salary exceeds Rs. 6500 per month. Holding a PPF account does not mean that one can be exempted from PF.

Thanks & regards,

R K Nair

Yes, any person joining an organization for the first time as a fresher can give a letter to the employer stating that they are not interested in PF enrollment voluntarily and wholeheartedly, and their salary is above ₹6,500 per month. They are considered an exempted employee under the EPF scheme and do not need to be enrolled in the EPF scheme. However, if they are already a member in any organization, they have to be covered under the EPF scheme.

Regards,
R. Palaniswamy

If she is earning more than ₹6,500, then she is exempt from PF. If she is earning less than ₹6,500, then she cannot be exempt from PF.

Thanks,

Regards

As per the PF department's clarification, if any employee is receiving a basic salary of more than Rs. 6500 per month, then based on his declaration (as per Form 11), he can opt out of the PF bracket. However, if the employee had PF contributions in a previous company and did not withdraw them, he must be added to the PF bracket.

PF Scheme Coverage and Exemption Details

The PF Scheme is a social security scheme extended to the whole of India. Here, I would like to mention the ceiling and exemption details:

- ₹6,500 per month is the wage ceiling up to which contributions can be made by both employees and employers. If both employees and the employer wish to contribute beyond the wage ceiling, there is no restriction.

- No employee can be exempted from the scheme. However, a person covered under the scheme who is above 58 years of age and has already benefited may be exempted from the coverage. Similarly, a person not covered under the scheme, who has not received any benefits and is over 58 years of age, should be included in the scheme if he joins an establishment covered under the scheme.

Regards,
Palani

Eligibility for PF Exemption After Promotion

I have a confusion. If someone is eligible under PF and they receive a promotion along with a salary increment, can they be exempted from PF with the same card or code number? Before the increment, their basic salary was less than ₹6,500, and now it is more than ₹6,500. Is it possible for this to happen?

Thank you.

Regards

If an employee is receiving more than 6,500 as a basic salary, can we remove them from the Provident Fund (P.F.)?

Regards,
Himmatsinh Zala

Establishment Exemption and Expat Files

I am adding a few files on Establishment Exemption (1-3) and on Expat (4 & 5). Kindly go through them and post your queries.

Regards

If the salary is more than Rs. 6500/-, then he can be exempted. However, the condition is that he should not have been a member of EPF earlier. You have to get Form No. 11 signed.

I understand that if any employee has a basic salary of more than 6500, they can opt for exemption under Section 17 by filing Form 1 and Form 11. Is this correct? Seniors, please clarify my doubt.

Regards,
Gauri

Can an employee exempt themselves and their employer from the deduction of PF if they give a written request stating that they do not want to enroll for PF deductions? Please advise.

Regards,
Suman Arora

In our company, the employer suddenly stopped the PF for those whose basic salary is more than ₹6,500/- without the consent of employees. Is this the right practice?

I had, for the first time, engaged 21 fresh accountants to work on a government project in Uttar Pradesh on a one-year contract basis, with a total fixed honorarium amount of Rs. 10,000 per month. Will these contractual workers be exempt from PF?

Thanks,
Rajiv