Regarding PF deductions for salaried persons beyond prescribed limit of contribution
Salary paid to an employee is Rs. 30,000 per month and PF contribution deducted as per rules i.e. 12% on Rs. 6,500/- which amounts to Rs. 780/- + 780/- = Rs. 1,560 (employee + employer).
Points for discussion are:
Case No. 1
1. The employee’s attendance is 30 days and earns full salary. His PF contribution is Rs. 780/- + 780/- = Rs. 1,560 (employee + employer) and accordingly form – 3-A will be generated.
Case No. 2
1. The employee’s attendance is 21 days then he earns Rs. 21,000/-.
What is his PF contribution:
a. Whether PF contribution remains same i.e. Rs. 1,560/- (employee + employer) on Rs. 6,500/-, or
b. PF contribution will be calculated on salary Rs. 4,550/- (Rs. 6,500/30*21) which amounts to Rs. 546/- + 546/- = Rs. 1,092 (employee + employer) ?
My questions in case No. 2 are:
1. In case (a) there is no service break shown as PF contribution of full amount of Rs. 6,500/-, but muster roll shows 4 days absent (i.e. service break) and accordingly form – 3-A will be generated.
2. In case (b) the employee has 4 days service break and contribution is on salary Rs. 4,550/- (Rs. 6,500/30*21) which amounts to Rs. 546/- + 546/- = Rs. 1,092 (employee + employer) so contribution and service break will be matched for same days and accordingly form – 3-A will be generated.
What is actual position as per rules under PF Act? Please guide.
KM Kogata