Understanding New Provident Fund Rules: Do We Need to Increase Our Contributions?

We were making a payment of the maximum PF of Rs. 6500.00 on the basic salary of Rs. 8000/-. Do we have to pay Rs. 960/- per the new amended rules of PF? Please advise.

Yes, you have to remit 12% on 8000, resulting in an amount of Rs. 960 to EPF.

Abbas.P.S

Also, please note that the PF is not only payable on the basic salary, but also on the Dearness Allowance and all other allowances that are payable regularly in terms of employment. It is not payable on HRA, Overtime allowance, Bonus, Commission, or any other payment in the nature of commission.

I am also confused regarding how much percentage to be deducted.

Eligibility for EPF Membership

1. Suppose I have an employee, and his drawn salary is ₹14,800/- gross per month. He is not a member of EPF, but now, as per the direction of the EPF department, the PF ceiling is increased to ₹15,000/-. My question is, is he eligible to be an EPF member or not?

2. I have a new recruit, and the proposed salary is ₹13,954/- gross per month. Is she eligible for EPF or not?

Dear seniors, please suggest what I should do. Hope for an early reply from your side.

Thanks & Regards

In both cases mentioned above, PF has to be remitted. It is now mandatory to pay PF for a salary up to Rs. 15,000/-.

Regards,
Abbas.P.S

Suppose an employee receives ₹14,950/- gross per month, and we structure his salary breakdown as follows: Basic - ₹6,000, HRA - ₹2,600, Conv. - ₹800, Spl. Allow. - ₹5,550. My question is, is this arrangement valid? Secondly, can we adjust his basic salary higher or lower, or is it mandatory to deduct his PF until his salary exceeds the ₹15,000/- limit?

Thank you.

Regarding your query, are you referring to PF remittance or the pay structure? In terms of PF, it is required to remit 12% of basic + DA (in this case Rs. 6000) to the PF account. As for any manipulation or discrepancies, I regret to inform you that I am unable to provide an answer at this time.

Best regards,
Abbas P. S

[QUOTE=rakesh_bhagat26@rediffmail.com;2188794] I am also confused regarding how much % to be deducted - the same 12% on basic.

1. Suppose I have an employee and his drawn salary is ₹14,800/- Gross per month - keep 50% or more in basic and deduct 12% on that.
₹14,800 - Basic could be ₹7,500, hence deduction is ₹900 + employer contribution is also ₹900
And he is not a member of EPF.
This is not possible unless you have a PF trust to give more benefits
But now, as per the direction of the EPF department, the PF ceiling increased to ₹15,000/-. Here is my question: is he eligible for EPF membership or not?

2. Having a new recruitment and his proposed salary is ₹13,954/-
Even if your housekeeping staff receives ₹7,000 as salary, you should deduct the EPF.

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