Can an Employee Opt-Out of PF and Still Receive Employer Contributions as Salary?

Please provide a solution for the below-mentioned illustration for the PF opt-out case. An employee has joined a company with a CTC of 30,000, which includes 10,000 as basic salary and 1,200 as the company's contribution towards PF. Since his basic salary is more than 6,500, he wishes for non-deduction of PF (Opt-out) and has filled out Form 11 for the same. Now, in this situation, is he eligible to receive the employer's contribution towards PF as a part of his salary, since it's been mentioned in his offer/appointment letter?

Regards,
Prafull Ghag

If he opts out on his own, then the employer contribution is not eligible even if it is mentioned in his offer.

An employee has the liberty to opt for PF, and if he does so, he is eligible to receive PF contributions as it is a part of his CTC. The employer may pay this amount as a taxable component to his employee, and it could be added to his gross salary.

In most companies, the employer doesn't contribute towards PF in an opt-out case, but it doesn't mean that it's an unfair practice.

Regards,
Prafull Ghag

An employee can opt for the provident fund if their basic salary is more than Rs. 6500/- per month, they have not been a PF member earlier, and have given consent by filling Form 11 (revised). They are entitled to the employer's share as part of their CTC.

Regards,
S S Rawat

Could you please clarify under which section an employee who opts out of PF is entitled to receive the employer's contribution towards PF?

Regards,
Prafull

Dear Prafull, The employee has joined on a 30k CTC. In the case of CTC, both side contributions are deducted from the amount only. If any employee wants an exemption, then a part of the PF can be deleted, and the salary structure can be modified accordingly. This is a common practice nowadays. In my company, I am the only one who has opted for the exemption, and then the structure was modified accordingly.

Regards, Rajendra