Understanding PF Contributions: Can Basic Pay Be Set Between Minimum Wage and INR 15,000?

Dear Members, I kindly request clarification on a few doubts related to the PF lower ceiling. My company aims to minimize PF costs without violating any prescribed rules.

During my visit to the PF office in my area, I was informed that the Basic pay could range between the Minimum wage and INR 15,000. 12% of this Basic amount would be considered legal.

1. If I set the minimum wage at INR 8,500 when the gross salary is INR 15,000, is this permissible?
2. Will PF be charged on the full INR 15,000?
3. Can the total of INR 15,000 be divided into Basic + HRA + Conveyance, with PF being charged only on the Basic amount?

Thank you.

Dear Members,

Kindly clarify a few doubts related to PF lower ceiling. My company wants to minimize PF costs without violating the prescribed rules.

I went to the PF office in my area, and they informed me that the Basic can be anything between the Minimum wage and 15000. 12% of this Basic would be considered legal.

1. If I set 8500 as the minimum wage when the gross salary is 15000, is it permissible? - Yes.

2. Will PF be charged on the full 15000? - No, it will be charged only on Basic + DA/Minimum Wage.

3. Can this total of 15000 be split into Basic + HRA + Conveyance, and PF be charged only on the basic amount? - Yes, you can split it, but Basic + DA should not be less than notified by the Appropriate Government.

Thanks