Employee PF Exemption After Contributions: Is It Possible and What’s the Process?

Dear All, One of our employees joined in January 2013 and became a member under PF. Accordingly, the PF amount was deducted from his salary until March '13. The particular employee has submitted a request to stop PF deduction from April '13 onwards, citing the reason that his basic salary is beyond Rs 6500/- and has opted for exemption. Can we exempt that employee from PF? If so, what forms need to be submitted to the PF office?

Procedure for PF Exemption

Please clarify if there is any special procedure to be followed for an employee to obtain PF exemption after three months of PF contributions to EPFO.

I request all seniors and professionals for their opinions and inputs on the above.

With regards,
Boppudi Venu

If any employee becomes a member of PF, there is no provision to stop his or her PF contributions even if the wages exceed 6500/-. However, the contributions shall be restricted to 6500/-.

Thank you.

PF Contribution Limit and Exemption

No contribution shall be continued on PF wages of INR 6,500/-.

Regards,
Ajay Pal Singh

As per the definition in Section 2(f)(ii) of The Employees' Provident Fund Scheme, 1952, an employee, "who is otherwise entitled to become a member of the Fund, becomes an 'Excluded Employee' when his basic salary [wage] + DA exceeds Rs. 6,500. So, for the purpose of earning interest on his earlier PF accumulation and for pension purposes, he may still continue to be a member of the Fund. However, going by the definition, you need not deduct or contribute PF in respect of his salary. I saw a similar view recently expressed on the website of the Kerala EPFO.

Regards,
Ramdas S. Iyer
Chennai

Excluded Employee Criteria Under EPF & MP Act 1952

An employee can be treated as an excluded employee only under the following circumstances:

(a) He was a member and withdrew the entire amount from the fund either on superannuation or upon migrating to a foreign country.

(b) At the time of becoming a member for the first time when his wage is more than Rs. 6500 per month.

(c) An apprentice as per the certified standing orders.

Other than the clauses mentioned above, you cannot term anybody as an excluded employee as per the current act in force. I am enclosing an extract of the EPF & MP Act 1952 regarding excluded employees for the benefit of all readers.

Regards,
P. Vathiraj

If an employee's per day salary exceeds 250, is PF compulsory or not? Please provide some references to me.

Regards,
Senraj Nagarajan

Dear Seniors, please guide me on the same issue: if he fills out Form 11 and the company submits it to the PF department, is he still exempt from PF deduction?

Regards

Dear Sir,

My salary was $6000 in 2013, and I was receiving an honorarium of Rs. 1000. I am wondering if I am eligible for EPF deduction. Should my honorarium be included in my salary, or will I be considered an excluded employee?

Kindly provide me with a response.

Regards,
Rahul Thakur
Marketing Executive

Dear All,

Further to add to this discussion, the wage ceiling limit has been increased to ₹15,000/- with effect from 1st September 2014.

Thanks and Regards,
Neha Bhardwaj