Is PF Deduction Necessary for Annual CL Encashment? Seeking Clarity!

ashwin2001

Sir, whether PF is to be deducted or not in CL encashment amount paid annually, please clear this doubt.

Regards,
Ashwin

Nirav Gandhi

If salary is generated with leave without pay, then PF should be deducted.

Regards,
Nirav

korgaonkar k a

PF Deduction on Leave Encashment

PF deduction does not apply to leave encashment, as per the Supreme Court judgment dated 12.03.2008 in Appeal (Civil) No. 1832/2004: Manipal Academy of Higher Education versus Provident Fund Commissioner.

EPFO has also decided to discontinue PF deduction on leave encashment through its circular No. Coord/3(4)2002/Clarification dated 05.05.2008, with immediate effect, based on the aforementioned judgment. In the same circular, EPFO further decided to offset PF contributions received on leave encashment against future liabilities.

Thank you.

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