Deduction of PF on special allowance

Dear Team,
Can any one please explain me what is deduction of PF on special allowance?
And how to adjust special allowance while doing CTC break up.
Regards,
Nandini

If Basic Wage more than minimum wages specified by Appropriate Government then no need to deduct PF but if less than then need to deduct PF.

Hi Prashanth,
Okay i agree with you but tell me,
1.if employees less then min wage will it be against as per government rule?
2. and in my company they r maintaining two separate register who will come under min wage and who will not come under min wage.
3. Can we deduct PF and ESI if they come under min wage?
4. Is there any PF rule employee have a option to opt for PF?
Please answer for the all 4 the questions.
Regards,
Nandini

PF has to be paid on Basic + DA. Some States are notifying DA as Spl allowance - in which case PF has to be paid on Spl allowance.However PF contribution has nothing to do with Minimum wages, because of the ruling by the EPF Appellate Tribunal and inclusion of HRA in the definition of " wages " under Sec 2 (h) of the Minimum Wages act 1948. Regards.
N Nataraajhan. Sakthi Management Services (Hp : + 91 94835 17402 ; E-mail : [Login to view])

Please clarify do minimum wages consider monthly gross (basic,da,conv,hra,spl) or only basic and da.

Considering the inclusion of HRA in the definition of " Wages " under Sect 2 (h) of the Minimum Wages Act and the Hon'ble Supreme Court's ruling in Airfreight case, we can have MW comprising of Basic, DA (as per Govt's Notification) and HRA (upto 40 % of MW. PF Appellate Tribunal and the Kerala HC have specifically held that MW could be split. Regards.
N Nataraajhan, Sakthi Management Services (Hp : + 91 94835 17402 ; E-mail : [Login to view])

Dear Nataraj,
in my company CA is telling minimum wage means all the remuneration which we are giving like basic+DA+HRA+Conv+Spec, is this correct?
Regards,
Nandini

Ms Nandini
It is true that the PF Appellate Tribunal and Kerala HC have held that MW wages could be split. However considering the inclusion of HRA in the definition of wages under Sec 2 (h) of the Minimum Wages Act and the Hon'ble SC ruling in Airfreight case, it is advisable to have MW comprising of Basic, DA and HRA until the final verdict by the Supreme Court.
Regards
N Nataraajhan, Sakthi Management Services