Hi,
My basic salary is Rs. 6510.00 in my new company, along with other allowances and incentives. My current employer is refusing to provide me a PF account, stating that as per the rules, it is not mandatory to create a PF account for a person whose basic salary is above Rs. 6500.00. Whereas my previous employer used to contribute to PF when my basic salary was Rs. 6600.00. Please advise, is my current employer correct?
Thank you.
From India, Calcutta
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My basic salary is Rs. 6510.00 in my new company, along with other allowances and incentives. My current employer is refusing to provide me a PF account, stating that as per the rules, it is not mandatory to create a PF account for a person whose basic salary is above Rs. 6500.00. Whereas my previous employer used to contribute to PF when my basic salary was Rs. 6600.00. Please advise, is my current employer correct?
Thank you.
From India, Calcutta
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Dear,
Your question itself is confusing. You are saying that your salary is $6510, including incentives and allowances. Then, your basic should be less than $6500.
Dear, if your basic is more than $6500, then you can push the employer for PF. If your earlier employer was providing you with any benefits, you cannot claim them here.
Thank you.
J. S. Malik
From India, Delhi
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174Your question itself is confusing. You are saying that your salary is $6510, including incentives and allowances. Then, your basic should be less than $6500.
Dear, if your basic is more than $6500, then you can push the employer for PF. If your earlier employer was providing you with any benefits, you cannot claim them here.
Thank you.
J. S. Malik
From India, Delhi
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In case your basic salary is more than Rs.6500/-, then the refusal of your present employer is correct. Regards, Sivadasan
From India, Udaipur
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From India, Udaipur
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Dear Ash,
First, understand your salary breakup. If it shows a basic salary below 6500/-, then your present employer can't refuse for PF. But if the basic salary is above 6500/-, then it is not mandatory for him to provide you with PF unless the company wants to offer it.
As you mentioned that your previous employer provided PF even when the salary was above 6500/-, in this case, if you are an old employee and there are increments in your salary pushing it above 6500/-, the employer cannot refuse to provide PF.
For further doubts, you can contact me at mulay.sanjay1@rediffmail.com.
Thank you.
From India, Pune
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First, understand your salary breakup. If it shows a basic salary below 6500/-, then your present employer can't refuse for PF. But if the basic salary is above 6500/-, then it is not mandatory for him to provide you with PF unless the company wants to offer it.
As you mentioned that your previous employer provided PF even when the salary was above 6500/-, in this case, if you are an old employee and there are increments in your salary pushing it above 6500/-, the employer cannot refuse to provide PF.
For further doubts, you can contact me at mulay.sanjay1@rediffmail.com.
Thank you.
From India, Pune
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Dear Friend,
Your employer cannot refuse to provide you a PF account on the basis that your basic salary is more than Rs. 6500/-, as it is clear that you are already a PF member through the previous employer. Now, you have the right to transfer your previous PF accumulations to the present one to increase the length of pensionable service.
With regards,
Nitin.
From India, Pune
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Your employer cannot refuse to provide you a PF account on the basis that your basic salary is more than Rs. 6500/-, as it is clear that you are already a PF member through the previous employer. Now, you have the right to transfer your previous PF accumulations to the present one to increase the length of pensionable service.
With regards,
Nitin.
From India, Pune
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hi if your basic + D.A. is less than or equal to 6500/ Rs. per month than your employer can’t deny Ritesh Jain M.S.W. ISS, AGRA
From India, Calcutta
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From India, Calcutta
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Hi Ash,
Please check if the employees on the payroll are more than 20; in that case, PF is involuntary. Otherwise, PF is voluntary. If there are fewer than 20 employees on the payroll, you will need to opt for voluntary PF, where the amount will be deducted from your take-home salary.
Regards,
Gaonkar
From India, Mumbai
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Please check if the employees on the payroll are more than 20; in that case, PF is involuntary. Otherwise, PF is voluntary. If there are fewer than 20 employees on the payroll, you will need to opt for voluntary PF, where the amount will be deducted from your take-home salary.
Regards,
Gaonkar
From India, Mumbai
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Dear friend,
If your basic pay is less than 6500/-, then your employer can't deny it. However, components like HRA, Medical, and Conveyance cannot be treated as part of the basic salary.
Sumit Kumar Saxena
From India, Ghaziabad
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If your basic pay is less than 6500/-, then your employer can't deny it. However, components like HRA, Medical, and Conveyance cannot be treated as part of the basic salary.
Sumit Kumar Saxena
From India, Ghaziabad
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Hello,
The factual and legal position is as follows:
Whether you are a new employee or an existing employee, if your salary (Basic+DA) is less than Rs. 6500/- per month, then the employer has NO CHOICE but to cover you under the PF Scheme.
If you are an existing employee (already covered under the PF Scheme) for the above reasons and over the years either due to annual increments or salary revisions, the day your salary (Basic+DA) crosses the threshold of Rs. 6500/- per month, you remain covered BUT your PF contributions will be stopped at Rs. 6500/- per month. This is perfectly in order by law. Some employers permit PF coverage beyond Rs. 6500/- per month, but that is their policy decision and the PF authorities will not object.
If you are a new joiner with a salary (Basic+DA) in excess of Rs. 6500/- per month, then the employer is NOT compelled by law to cover you under the PF Scheme EXCEPT if the employer has a policy like stated above. In such a case, the Employer has a couple of choices - either to cover you and cap your PF contributions to a Salary (Basic+DA) at Rs. 6500/- per month OR to cover you for your entire salary (Basic+DA), and the choice can also be to NOT cover you at all!
Whatever the situation, the employer has to follow a UNIFORM application of the law and their policies.
I trust the matter is clear to you now! If you have further doubts, please raise them as that would benefit the entire community of CiteHR.
Regards,
samvedan
January 22, 2009
From India, Pune
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The factual and legal position is as follows:
Whether you are a new employee or an existing employee, if your salary (Basic+DA) is less than Rs. 6500/- per month, then the employer has NO CHOICE but to cover you under the PF Scheme.
If you are an existing employee (already covered under the PF Scheme) for the above reasons and over the years either due to annual increments or salary revisions, the day your salary (Basic+DA) crosses the threshold of Rs. 6500/- per month, you remain covered BUT your PF contributions will be stopped at Rs. 6500/- per month. This is perfectly in order by law. Some employers permit PF coverage beyond Rs. 6500/- per month, but that is their policy decision and the PF authorities will not object.
If you are a new joiner with a salary (Basic+DA) in excess of Rs. 6500/- per month, then the employer is NOT compelled by law to cover you under the PF Scheme EXCEPT if the employer has a policy like stated above. In such a case, the Employer has a couple of choices - either to cover you and cap your PF contributions to a Salary (Basic+DA) at Rs. 6500/- per month OR to cover you for your entire salary (Basic+DA), and the choice can also be to NOT cover you at all!
Whatever the situation, the employer has to follow a UNIFORM application of the law and their policies.
I trust the matter is clear to you now! If you have further doubts, please raise them as that would benefit the entire community of CiteHR.
Regards,
samvedan
January 22, 2009
From India, Pune
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Dear Ash,
First, understand your Salary Breakup. If it shows Basic Salary below 6500/-, then your present employer can't refuse PF. However, if the Basic Salary is above 6500/-, then it is not mandatory for him to provide you with PF. If the company wants, only then you can get it.
As you mentioned that your previous employer was providing PF even if the salary was above 6500/-, in this scenario, if you are an old employee and there are increments in your salary pushing it above 6500/-, then the employer cannot refuse.
For further clarification, you can contact [IMG]https://www.citehr.com/misc.php?do=email_dev&email=bXVsYXkuc2Fuam F5MUByZWRpZm1haWwuY29t[/IMG].
Hi Sanjay,
Can you provide information from the PF organization stating that it is not mandatory for those earning more than 6.5 k? Do you have any rules or articles published by the PF organization? Please share them with me if you have access to them.
Thanks,
Mahesh
From India, Bangalore
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First, understand your Salary Breakup. If it shows Basic Salary below 6500/-, then your present employer can't refuse PF. However, if the Basic Salary is above 6500/-, then it is not mandatory for him to provide you with PF. If the company wants, only then you can get it.
As you mentioned that your previous employer was providing PF even if the salary was above 6500/-, in this scenario, if you are an old employee and there are increments in your salary pushing it above 6500/-, then the employer cannot refuse.
For further clarification, you can contact [IMG]https://www.citehr.com/misc.php?do=email_dev&email=bXVsYXkuc2Fuam F5MUByZWRpZm1haWwuY29t[/IMG].
Hi Sanjay,
Can you provide information from the PF organization stating that it is not mandatory for those earning more than 6.5 k? Do you have any rules or articles published by the PF organization? Please share them with me if you have access to them.
Thanks,
Mahesh
From India, Bangalore
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An employee whose salary at the time of his joining the scheme (PF) exceeds Rs 6500 is an EXCLUDED employee as per scheme 2 (f )(ii) of the Employees Provident Funds Schemes, 1952. Regards, Madhu.T.K
From India, Kannur
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From India, Kannur
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Hi, Mr. Madhu,
Thanks for your valuable reply. I have another question regarding PF. If an employee joins an organization where the employer is not deducting the PF at all because all the employees in the organization have a basic salary of more than 6500/-, and this new person also has a basic salary exceeding 6500/- but in his previous organization, his PF was being deducted.
So, my questions are:
1) Can he compel the current employer to deduct his PF?
2) If he can't compel the current employer, can he withdraw his PF from authority?
3) What if his basic salary is less than 6500/-? Can he compel the current employer to deduct it? According to the PF Act, there should be 20 people working for PF deduction. Does he have another choice?
Please let me know if you need more info.
Thanks,
Mohit
From India, Ludhiana
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Thanks for your valuable reply. I have another question regarding PF. If an employee joins an organization where the employer is not deducting the PF at all because all the employees in the organization have a basic salary of more than 6500/-, and this new person also has a basic salary exceeding 6500/- but in his previous organization, his PF was being deducted.
So, my questions are:
1) Can he compel the current employer to deduct his PF?
2) If he can't compel the current employer, can he withdraw his PF from authority?
3) What if his basic salary is less than 6500/-? Can he compel the current employer to deduct it? According to the PF Act, there should be 20 people working for PF deduction. Does he have another choice?
Please let me know if you need more info.
Thanks,
Mohit
From India, Ludhiana
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Hi, Mr. Samvedan,
Thank you for your valuable reply. I have another question regarding PF. If an employee joins an organization where the employer is not deducting the PF at all because all the employees in the organization have a basic salary exceeding 6500/-, and this new employee also has a basic salary exceeding 6500/- but had PF deductions in his previous organization, my questions are:
1) Can he compel the current employer to deduct his PF?
2) If he cannot compel the current employer, can he withdraw his PF from the authority?
3) What if his basic salary is less than 6500/-? Can he compel the current employer to deduct it? According to the PF act, there should be 20 people working for PF deductions, or does he have another choice?
Please let me know if you need more information.
Thank you,
Mohit
From India, Ludhiana
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Thank you for your valuable reply. I have another question regarding PF. If an employee joins an organization where the employer is not deducting the PF at all because all the employees in the organization have a basic salary exceeding 6500/-, and this new employee also has a basic salary exceeding 6500/- but had PF deductions in his previous organization, my questions are:
1) Can he compel the current employer to deduct his PF?
2) If he cannot compel the current employer, can he withdraw his PF from the authority?
3) What if his basic salary is less than 6500/-? Can he compel the current employer to deduct it? According to the PF act, there should be 20 people working for PF deductions, or does he have another choice?
Please let me know if you need more information.
Thank you,
Mohit
From India, Ludhiana
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dear if u are a regular employee u should get the benift of PF deduction.already u hve account in previous company.u have a right to ask ur employee. hari
From India, Hyderabad
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From India, Hyderabad
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dear if u are a regular employee u should get the benift of PF deduction.already u hve account in previous company.u have a right to ask ur employer hari
From India, Hyderabad
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From India, Hyderabad
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Hello,
As per rules, if you are basic+DA < 6500, you will be entitled to a 12% deduction from your salary. If your basic+DA is greater than 6500, you will still be entitled to PF deductions, but that deduction amount will be standardized at 6500. Therefore, employees will not have more than 780 deducted per month, even if their salary is in lakhs. This rule is followed by almost all companies.
In some companies, regardless of the salary, PF deductions will be optional for employees. If they wish to deduct, the company will allow it.
Thank you,
Hari
From India, Hyderabad
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As per rules, if you are basic+DA < 6500, you will be entitled to a 12% deduction from your salary. If your basic+DA is greater than 6500, you will still be entitled to PF deductions, but that deduction amount will be standardized at 6500. Therefore, employees will not have more than 780 deducted per month, even if their salary is in lakhs. This rule is followed by almost all companies.
In some companies, regardless of the salary, PF deductions will be optional for employees. If they wish to deduct, the company will allow it.
Thank you,
Hari
From India, Hyderabad
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Dear Mohit,
If an employee who was earlier covered by PF in the past employment joins with a salary of more than Rs 6500 and the present employer refuses to give him PF, there is no option for the employee. He can retain his scheme certificate (if he has one) until he joins another employment where he has PF or until he attains the age of 58 to receive a pension.
For the coverage of the establishment, only the number of employees is considered. If there are 20 employees, the establishment will be covered. If all twenty employees are earning salaries above Rs 6500, then all employees will be excluded; however, the coverage for the establishment will still be in place.
Suppose a new employee joins and their salary is below Rs 6500. Naturally, they will be covered, and the company cannot refuse to contribute PF on the grounds that the number of employees earning over Rs 6500 is not more than 20.
Regards,
Madhu.T.K
From India, Kannur
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If an employee who was earlier covered by PF in the past employment joins with a salary of more than Rs 6500 and the present employer refuses to give him PF, there is no option for the employee. He can retain his scheme certificate (if he has one) until he joins another employment where he has PF or until he attains the age of 58 to receive a pension.
For the coverage of the establishment, only the number of employees is considered. If there are 20 employees, the establishment will be covered. If all twenty employees are earning salaries above Rs 6500, then all employees will be excluded; however, the coverage for the establishment will still be in place.
Suppose a new employee joins and their salary is below Rs 6500. Naturally, they will be covered, and the company cannot refuse to contribute PF on the grounds that the number of employees earning over Rs 6500 is not more than 20.
Regards,
Madhu.T.K
From India, Kannur
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Did the new law that it is compulsory for a company to provide PF if it has 10 or more employees on its rolls has come into effect
From India, Calcutta
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From India, Calcutta
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dear saswati the new relu for which u are taking to impliment PF on 10 or more employee is not yet implimented. tks j s malik
From India, Delhi
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From India, Delhi
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Dear All,
Please help because this is something very urgent: one of my friend's companies had a PF inspection, during which the PF inspectors stated that the deductions made for PF are not correct and legal. They are demanding the balance remitted amount.
In my friend's company, PF deductions are calculated based on the Basic Pay. However, according to the PF inspector, the deductions should be based on Basic wages, which include all allowances except HRA, incentives, commissions, and bonuses.
The salary structure of my friend's company is as follows:
- Basic pay
- HRA
- TA
- OA
Please suggest the correct calculation method.
Thank you.
From India, Mumbai
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Please help because this is something very urgent: one of my friend's companies had a PF inspection, during which the PF inspectors stated that the deductions made for PF are not correct and legal. They are demanding the balance remitted amount.
In my friend's company, PF deductions are calculated based on the Basic Pay. However, according to the PF inspector, the deductions should be based on Basic wages, which include all allowances except HRA, incentives, commissions, and bonuses.
The salary structure of my friend's company is as follows:
- Basic pay
- HRA
- TA
- OA
Please suggest the correct calculation method.
Thank you.
From India, Mumbai
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If your friend's company had deducted PF from a fair amount, these questions from the PF Enforcement Officer should not have arisen. In order to reduce the burden of PF, many companies show a very small amount as Basic Salary, and the rest will be HRA, Conveyance Allowance, etc. PF is a social security arrangement for the benefit of employees, and the enforcing authorities will certainly try to enlarge the net by forcing the employers to remit on higher amounts. However, as per the Act, PF is payable only on basic salary and Dearness allowance. But at the same time, any other allowance which gives at least an indirect impression of salary can be taken as salary, which qualifies for contribution towards PF. In your salary breakup, TA and OA (I don't know what all these are) may also be treated as salary unless you explain why these are paid. Therefore, you have to give clarifications on these components before the Asst. Provident Fund Commissioner when you are given an opportunity to be heard in person. (Usually, you will get a summons to appear before the Asst. Provident Fund Commissioner following section 7 A of the EPF & Misc. Provisions Act, and that inquiry is referred to as 7 A inquiry.)
There are many issues connected with such lesser contributions, and many issues are before various courts also. The PF authorities claim that PF should be contributed at least on minimum wages. But at the same time, they have no right to enforce minimum wages because under the Minimum Wages Act, the enforcing authority is the State's Labour department. If both these departments join hands, there could be a definite answer to the question of what minimum amount should PF be contributed. Till then, the PF department has its own circular saying that PF shall be calculated at least on 70% of the total salary subject to a maximum of Rs 6500.
Regards,
Madhu.T.K
From India, Kannur
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There are many issues connected with such lesser contributions, and many issues are before various courts also. The PF authorities claim that PF should be contributed at least on minimum wages. But at the same time, they have no right to enforce minimum wages because under the Minimum Wages Act, the enforcing authority is the State's Labour department. If both these departments join hands, there could be a definite answer to the question of what minimum amount should PF be contributed. Till then, the PF department has its own circular saying that PF shall be calculated at least on 70% of the total salary subject to a maximum of Rs 6500.
Regards,
Madhu.T.K
From India, Kannur
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PF Calculation Sheet To The Subscribers At the Time Of Provident Fund Withdrawal.pdf
PF-Know Employees Provident Fund-CHART-L-4. doc