EPF Deduction Components and Limits
Components considered for the deduction of EPF are basic + DA/VDA + food conc. (if any). However, please note that the basic salary must not be less than the minimum wages as defined by the state from time to time. Additionally, for basics up to Rs. 6,500/-, the deduction of EPF is mandatory. If the basic exceeds Rs. 6,500/-, then it is solely dependent on the employer to provide the benefit of EPF to its employees.
Furthermore, it is also up to the employer to decide whether to deduct EPF on the actual basic or restrict it to Rs. 6,500/-. Once an employee becomes a member of EPF, the facility cannot be withdrawn until their basic exceeds a certain limit, which may be restricted to Rs. 6,500/-. However, the accumulation of EPS/EDLI should be done based on Rs. 6,500/-.
I hope this clarifies your doubts. Please refer to my previous postings for further information.
Thanks & Regards,
Sumit Kumar Saxena