Dear Friends,
It appears that you are being confused with the PF deduction.
Firstly, Total Contribution Provident fund is 24% plus administrative charges borne by the employer . IN that 24% employer's contribution is 12% + admin charges, and employees contribution is 12%.
secondly, this 12% is calculated on the basic salary amount.
thirdly, there are mainly TWO kinds of PF contributions : 1) Limited PF and 2) Unlimited PF
Limited PF, as discussed above has the MAXIMUM limit of Rs. 6500/-. That is the Limited Companies who wants contribute the fixed amount of PF irrespective of the salaried drawn by the employees would opt for the limited PF.
Say in case if the employees basic salary is Rs. 4500/-pm the employer shall pay 12% of RS. 4500/-, in case if the employees basic pay is Rs. 7500/- then the employer pays 12% of only for 6500/- though the employees basic exceeds from it.
Unlimited PF : is where the company opts for paying 12% on what ever the basic drawn by the employees.
This whole concept of Limited and Unlimited PF is called "PF Ceiling Effect"....
There is also another situation where the Employer is exempted from PF. This does not mean that the employer need not pay the PF amount but he will not take the PF code from any of the PF authorities to pay the amount!! Need not get surprised.. It is Because, these companies will have there own PF Offices at there Companies, the reason behind this is the major turn over and transactions of the company. (Such PF authority at the company will be controlled by the government itself...)
From 12% of the PF payment 8.33% will go to the pension fund........
So there need not be any confusions as to the PF payment and the kinds pf PF/Ceiling of PF............ It is like PF is the tree and the Ceiling of PF the branch........