Understanding Salary Deductions: How Do PF, ESIC, and Professional Tax Work?

Hi, I want a detailed knowledge of the deduction of P.F., ESIC, and professional tax.

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Sure, I can help you with that.

Firstly, Provident Fund (P.F.) is a mandatory savings scheme for employees in India, where a percentage of the employee's salary is deducted and contributed towards the fund. This fund helps employees save for their retirement.

Secondly, the Employees' State Insurance Corporation (ESIC) is a social security and health insurance scheme for Indian workers. Both the employer and the employee contribute a percentage of the employee's salary towards this scheme, providing the employee with medical benefits and compensation for loss of wages due to sickness, injury, or maternity.

Lastly, Professional Tax is a tax levied by state governments on individuals working in professional fields like doctors, lawyers, accountants, etc. The tax amount varies from state to state and is deducted from the salary of employees falling under the tax bracket.

I hope this information helps you understand the deductions better. Let me know if you need more details on any of these topics.

Dear Dilip,

If you search, you will get details in various posts. For your reference, here are a few basic details. PF is contributed at 12% of Basic & DA from both the employee and employer sides. ESIC is deducted at 1.75% of the gross salary per month from the employee and 4.75% of the gross from the employer, with a ceiling of 10,000/- per month only. If one's gross is more than 10,000/-, then they shall be exempted from the ESIC.

Professional tax is deducted from the gross salary, with different ranges for deductions that vary from state to state. For example, in Gujarat, up to 3000 gross salary is exempted from PT, up to 5999/- deducts Rs. 20, up to 8999/- deducts Rs. 80, up to 11999/- attracts 150, and above that attracts 200/- rupees.

Regards,
Amit Seth.

Dear Deepak,

ESI is deducted from both the sides, the employee as well as the employer. All the employees whose gross salary is below rupees 10,000 per month are covered under ESIC. The calculation is made as follows:
- Employee side = Gross Salary * 1.75%
- Employer Side = Gross Salary * 4.75%
- Total = 6.5%

PF contribution is made equally from both sides, the employee and the employer, at 12% of the Basic salary. Out of the 12% of the employer's contribution, 8.33% goes to the Pension Fund, and the remaining 3.67% goes to the Provident Fund.

Therefore, the total contribution in the Provident Fund is 12% + 3.67% = 15.67%, and in the Pension Fund, it is 8.33%.

Regards,
Amit Seth

Can anyone please share with me the PF yearly return date and all related forms of PF? Also, I would like to know the ESIC half-yearly return due date and the corresponding form.

Thanks & Regards,
Vaibhav

I just want to clarify Mr. Amith Seth's description. The ESI is applicable to people whose gross salary is below ₹15,000 per month.

Understanding PF and ESIC Returns

This is the basic knowledge about PF & ESIC, but what about the PF return? What are the clauses of the ESIC half-yearly return and the form number? I need end-to-end details. Can any expert please elaborate on the same?

Regards

Detailed Knowledge About ESIC, PF & PT

Hi, I want a detailed knowledge of the deduction of P.F., ESIC, and Professional Tax. Please help me.

Regards