Can Employees Contribute More to PF Beyond the Basic Limit? Seeking Clarity on Rules and Interest

Dear all,

Under sec 29(2) of the PF Act, no upper limit of employees' contribution is defined. Can an employee with a basic salary of 30,000 P.M. contribute 20,000 towards his contribution? The employer will, however, pay 12% on basic max. If yes, is there any law or case law on this? Will the PF department pay interest on employees' additional voluntary contribution?

Regards,
Suresh

I am in agreement with you.

The employer only has to contribute towards the PF contribution at 12% of the basic salary + DA. The employee can contribute more than 12%, and the PF department will provide interest on the amount exceeding the first 12%.

(G K Sharma)

Dear sureshjakhotiya,

The maximum percentage an employee can contribute is 20% of basic. And yes, you will get interest on your voluntary contribution. However, in reality, your employer will only provide their 12% contribution on basic.

Thank you.

Dear All,

I am having a query regarding PF contributions for those who wish to opt for the PF scheme voluntarily for tax benefit purposes. In our organization, one of the employees wishes to join the PF scheme with a basic pay of Rs. 57,000. Hence, the employee's contribution will be Rs. 6,840 (12% of basic), and the employer's contribution will also be Rs. 6,840 (12% of basic). As an employer, we have to pay administrative charges of Rs. 775 (1.36% of Rs. 57,000). My queries are as below:

1) Do we need to pay any additional administrative charges for such a higher amount, i.e., Rs. 57,000 (more than the ceiling amount), apart from Rs. 775?

2) Do we need to provide a joint declaration to the PF office in the above case? I think it is for those who wish to contribute higher than 12% of the basic?

Grateful if seniors can advise me as soon as possible.

Thanks in advance,

Nikita