Dear All, My query is that Can Salary be adjusted for PF Contribution:
The facts are as under-
1. The basic salary of an employee is Rs 600,000. Both employee and Employer are paying 12% contribution.
This is happening for past 4 years
2. Thus annually, both employee and employer are contributing Rs 8,64,000 each as PF contribution.
3. After the recent amendment to Income-tax Act, the contribution by the employer exceeding Rs 750,000 attracts TDS, hence the employee is not interested to contribute/ get employer contributions exceeding Rs 750,000. Therefore he wants to get his salary rationalized.
4. I understand in such cases, where an employee opts for PF contribution, he can restrict his contribution 1800pm (21,600 per year) onwards till any amount upto limit of salary.
5. can he restrict PF Contribution to Rs 750,000 per year ( even though he had been contributing higher earlier)
6. Please share provisions of the EPF Act, for yes or no as an answer. If yes, would there be any implications on the employer?
The facts are as under-
1. The basic salary of an employee is Rs 600,000. Both employee and Employer are paying 12% contribution.
This is happening for past 4 years
2. Thus annually, both employee and employer are contributing Rs 8,64,000 each as PF contribution.
3. After the recent amendment to Income-tax Act, the contribution by the employer exceeding Rs 750,000 attracts TDS, hence the employee is not interested to contribute/ get employer contributions exceeding Rs 750,000. Therefore he wants to get his salary rationalized.
4. I understand in such cases, where an employee opts for PF contribution, he can restrict his contribution 1800pm (21,600 per year) onwards till any amount upto limit of salary.
5. can he restrict PF Contribution to Rs 750,000 per year ( even though he had been contributing higher earlier)
6. Please share provisions of the EPF Act, for yes or no as an answer. If yes, would there be any implications on the employer?