Confused About PF Deductions on My Salary? Need Help Understanding the New Rules

My CTC per month is 16,000. The basic salary is 3,700, and the HRA is 1,110. Can anyone tell me, as per the new amendment, what amount of deduction will be made from the monthly salary?

Currently, my employer is deducting Rs. 1,000 as a PF deduction from our salary. If the employer is incorrect, could anyone please share the circular and provide the exact calculation?

Please assist.

Regards.

PF is deducted on basic + DA, so your basic is 3,700. Hence, 12% is deductible on 3,700.

Regards,
Rajeev Dixit

Thank you, Rajeev. I just saw my salary slip. The employer has deducted PF on (Basic Salary 3700 + Sp. Duty Allowance 7995) = 11695 * 12% = 1403. Is this deduction in line with PF rules and legal requirements? If not, what steps can I take to address this issue with the employer?

Understanding PF Allowances and Contributions

Allowances, as declared in the PF Act and in line with judicial pronouncements, are covered. You should be rather happy since the employer also has to add the employer's contribution. You will be able to build a better corpus for your future.

It is always better to transfer PF than to withdraw and keep the account regular to be eligible for a pension and various other benefits. You may go through the FAQ on the EPFO website and speak to the PRO/APFC at the nearest PF office.

First of all, PF deduction is not a loss to you or a gain to the employer. Rather, you should check that your company is also contributing an equal amount. Though you may get a little less amount in hand today, you are securing your future.

As seniors have pointed out, you should be happy if the employer is deducting more because the employer also has to contribute the same amount, which goes into your EPF credit. In fact, the employer is the one at a disadvantage in your case.

Legality of EPF Deductions

As regards legality, as per the EPFO circular dated 18/03/2014 (search this site for the circular), EPF wage is defined as Basic + DA + food coupon + retaining allowance.

Regards,