Is There a Maximum Limit for PF Deduction on My Rs. 57,000 Salary? Seeking Advice

Inquiry About PF Deduction

This is Pardeep. I have been working with an FMCG company since 2006. Until now, my company has not deducted any PF. However, today the company informed me that PF deduction is mandatory starting from October. I would like to inquire about the maximum limit for PF deduction. My present salary is Rs. 57,000/- (without any deductions). Please advise.

Regards,
Pardeep

I am Santosh, working as an HR professional. PF is deducted from your basic salary at a rate of 12% each from you and your employer.

Thanks

PF Deduction Requirements

The statutory requirement is a PF deduction at 12% of basic + DA. There is a statutory salary ceiling of ₹15,000 per month, meaning that the maximum deduction is ₹1,800. Even if the actual salary levels are higher, the amount of PF remains the same.

The company can deduct more with the approval of the employee.

Compulsory PF Deduction Inquiry

How can PF be compulsory on a fine morning on a salary of Rs. 57,000/- per month?

Regards,
Varghese Mathew

You are not eligible for Provident Fund membership statutorily as you are drawing a salary of Rs. 57,000/-. You are considered an excluded employee. If you wish to contribute to the PF, you can do so. This is a welcome gesture from your employer to provide for your well-being, and you will also be eligible for Income Tax exemption for the PF contributions. I recommend opting for PF enrollment.

Regards,
[Username]

Please inform the forum about the Salary Breakup, i.e., Basic and/or DA, if applicable, to provide you with a comprehensive view. As mentioned by the forum members above, if your Basic + DA exceeds Rs. 15,000/- per month, you can opt to be excluded from PF membership, if desired.

One correction here. One does not automatically become an exempted employee. As such, everyone is covered under PF. However, employees falling under the definition of exempt can opt for exemption by filing an application (form 11). But I agree with you, it's a good idea to opt for PF. It carries 8.5% tax-free income, plus tax benefits and a retirement fund, all of which are important.