Transitioning from PF to PPF: Is It Okay to Stop PF for Higher Salary Employees?

Hi, my company is providing PF to employees. Now, we are considering starting PPF instead of PF due to various issues with the Provident Fund Department. We do not want to discontinue all PF but intend to continue with the salary limit of Rs. 6500. However, we wish to discontinue providing PF for the higher salary class, who were not previously covered under PF but were given PF voluntarily. This particular section of PF will be transitioned to PPF.

Transitioning from PF to PPF

Is it permissible to stop providing PF for the higher salary class even though they are not covered under the Act?

Thank you.

Dear Biju,

You cannot stop existing employees' PF deduction even if they are earning a basic salary of more than ₹6,500. It is applicable for new employees only. For making an exemption from the act, you need to submit the prescribed form to the concerned department within 30 days from the date of joining of the employee. If you have any further doubts, please reply.

Regards,
Janardan

Provident Fund Discontinuation for Higher Salary Class

An active PF cannot be discontinued. For new employees, you can take Form 11 and not deduct the PF from them. For the higher grade, the minimum PF applicable for Rs. 6500/- continues.

Regards.

Clarification on PPF vs. PF for Employers and Employees

PPF is not a substitute for PF for employers but is for employees. As advised by other members, an employee who is a member of PF cannot be discontinued.