Can We Legally Lower PF Contributions from 20000 to 15000? Seeking Advice on Compliance

Hi, I need a suggestion! Can we reduce the PF contribution to the limit of 15000/-, where currently we are making the contribution of more than 15000/- for both employees and employers? For example, if currently we are calculating the PF on 20000/-, can we now reduce the amount to 15000/-? Is this allowed as per the act? Please provide your inputs. Thanks

Reducing PF Contribution to Rs 15,000: Legal Considerations

Yes, you can do it provided your contribution is on a salary which is not less than Rs 15,000. If you have been deducting PF on Rs 20,000 and now decide to change the PF contributing salary to an amount less than Rs 15,000, say, Rs 12,000, then it will be a violation of Section 12 of the EPF & MP Act. This section states that the employer should not reduce the salary for the purpose of reducing their contribution to PF. However, since the PF authorities cannot demand a contribution on any salary above Rs 15,000, a reduction in PF contributing salary up to Rs 15,000 is permissible. This was clarified by the Supreme Court in Marathwada Gramin Bank's case.