Seeking Guidance on High Provident Fund Deductions from Gross Salary in India

Dear Team,

I am seeking your expert advice. My gross salary is Rs. 98,000, and my company is deducting an employer's Provident Fund (PF) contribution of Rs. 5,326 and an equal amount as an employee's contribution. Consequently, the total PF deductions of Rs. 10,652 are being subtracted from my gross salary, leaving me with a net salary of Rs. 88,000.

I approached my company's HR department with a request to reduce the deductions to Rs. 3,600 (Rs. 1,800 each for the employer and employee parts), but they have outrightly refused.

It's worth noting that my company manages the PF through their own trust, not directly with the PF Department.

I am reaching out to you for suggestions as I am not in a position to bear a Rs. 10,000 deduction from my salary. Your guidance would be highly appreciated.

I understand your concern about the high Provident Fund (PF) deductions from your salary.

As per the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, the PF contribution is 12% of the basic salary from both the employee and the employer. The company has the right to deduct this amount. However, if the company has its own PF trust, they may have their own rules, which could be the reason for the higher deduction.

You can take the following steps:

1. Request a copy of the rules of the company's PF trust. This will help you understand the basis for the high deductions.
2. If the rules of the trust are in line with the standard PF rules, you can approach the HR department again with a formal written request to reduce the PF deductions. Make sure to mention the standard PF rules in your request.
3. If the company refuses to adjust the deductions, you can seek legal advice. You can also file a complaint with the regional provident fund commissioner.

Remember, it's important to have a clear understanding of your salary structure and the associated deductions. It's also crucial to know your rights as an employee. If you need more information on PF rules, you can visit the official EPF India website at https://www.epfindia.gov.in.

PF Contributions

- Your salary: Rs. 98,000
- Employer's PF contribution: Rs. 5,326
- Employee's PF contribution: Rs. 5,326
- Total PF deductions: Rs. 10,652
- Net salary: Rs. 88,000

The PF contributions are calculated as 12% of your basic salary (subject to a maximum of Rs. 15,000 basic salary). Since your company manages the PF through their own trust, they might have some flexibility in how they handle the contribution
Your company's PF trust may have its own rules governing contributions as against the mandtaed 12% deductions from the basic slary as pre PF act. strcitly speaking the company's PF trust rules should be in keepingwith the pf rules
.

Suggest to have a detailed discussion once again with your HR department to understand their perspective on reducing the deductions. .
You may request your HR department to provide you with the rules governing your company's PF trust. This might give you insight into whether there's any flexibility in the contribution amounts 📝.

If inspite of the above there is no positive reply from your HR Departmemt,, you might consider escalating the issue to a higher authority, such as your company's Apex management or a regional PF office for a solution to your concern 🌟.

Based on your situation, here are the steps you can consider:

1. Understand the Rules of Your Company's PF Trust: As your company manages the PF through their own trust, they might have their own rules which could be different from the standard PF rules mandated by the government.

2. Request for the PF Trust Rules: Ask your HR department for a copy of the rules governing your company's PF contributions. This might provide you some insights on the flexibility of the contribution amounts. 📝

3. Discuss with HR Department: Have a detailed discussion with your HR department regarding your concern about the high deductions. Explain your financial situation and request them to consider reducing the deductions. You should also clarify whether the company's PF is in accordance with the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

4. Escalate: If there's no positive response from your HR department, consider escalating the issue to a higher authority such as your company's management or a regional PF office.

5. Legal Advice: If your company continues to refuse to adjust the PF contributions, you may wish to seek legal advice.

6. External Help: You can also consider reaching out to the Employee's Provident Fund Organisation (EPFO) through their grievance management system https://epfigms.gov.in/.

Remember, the primary purpose of the PF is to provide financial security to employees after their retirement. The higher your contribution, the greater your financial security in the future. However, the contribution should not make your present financial situation difficult. Good luck! 👍