Dear All,
As the circular is initiated from PF office dated 30.11.2012 which in the context of Section 7-A (Determination of money due from employer).
One of the point mentioned in the circular i.e. number 12 is showing "SPLITTING OF WAGES" which is defined as:-
Previously under Section 2(b) (ii) of the Act as "commission" and "any other similar allowance" are there which is encouraging the subterfuge of splitting of wages to exclude the PF liabilities.Thus now the definitions of "basic wages" is clearly been mentioned with the circular as all the allowance which are being paid to the employee on regular basis shall be the part of "Basic Wages".
Hence, as per my understanding the circular have no impact on Maximum ceiling limit for the calculation of PF i.e. 12% of basic(Max Limit 6500) as given under para 26A of PF scheme.
Thus, only the consideration of Basic Wages shall be have clubbed of all allowances which are being paid on monthly basis but if not exceeding the ceiling limit i.e. 6500.
Please write if you have any ambiguity pertaining to my understanding jotted above.
Regards,
Pushkar Bisht