Understanding Provident Fund Deductions: Is There a Cap on Contributions?

Is there any restriction on PF deduction (i.e., Rs. 780/- only) as per the Provident Fund Act? If yes, please provide me with the write-up for the same.

Thanks.

The PF Act does not restrict the contribution amount, but the employer is not legally bound to pay the PF contribution above 12% of ₹6,500 Basic + DA (i.e., ₹780).

Explanation:

1. If both the employer and employee are willing to contribute more than ₹780, they can do so.
2. If an employee wishes to contribute 100% of their basic salary, but the employer does not agree, then the employer can pay only 12% of the basic salary up to the ceiling of ₹6,500 (Ceiling Value effective from 1/6/2001), as the employer is not legally obligated to pay more than that.