If a new employee is appointed at a salary of 35,000/-. The breakup of which is as under: Basic: 14,000/- HRA: 7,000/- CCA: 10,000/- Other allowances: 4,000/- Is it compulsory to deduct his PF? Or can he be considered as an exempted employee.
Yes, it is mandatory to deduct PF in the aforesaid case. PF can be exempted only when an employee earns a basic of more than INR 15,000 at the time of joining and was not a member of EPFO ever before. However, I suggest everyone subscribe to PF. It's the only retirement and social security scheme available to us, the working class, and the returns are much higher than bank FDs.
Regards,
Rahul Chhabra
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