Hi all
Mr.Madan Mohan rightly said that this is a very basic question which can be referred from PF act. Members can ask the difficult questions which may be tough to handle practically.
K.R.Shanmugham
GM HR
From India, Bhavani
Mr.Madan Mohan rightly said that this is a very basic question which can be referred from PF act. Members can ask the difficult questions which may be tough to handle practically.
K.R.Shanmugham
GM HR
From India, Bhavani
Dear Mr. K.R.Shanmugham,
You have written so much for Mr. Madan Mohan I think if you woud have written something related to this topic i will really appreciate both of you. We are not here to show anyone down but this site is to share and help eachother.I will request you to do the same.
Regards,
Shikha
From India, Ludhiana
3You have written so much for Mr. Madan Mohan I think if you woud have written something related to this topic i will really appreciate both of you. We are not here to show anyone down but this site is to share and help eachother.I will request you to do the same.
Regards,
Shikha
From India, Ludhiana
Provident Fund (PF) is a statutory deduction to be done by employers as per the rules made by Government of India. As per the PF rules, both the employee and the employer make a contribution to the PF fund of the employee. Every month, the contributed amount gets added to the balance of the employee. The PF contributions earn a fixed interest (9% p.a.) and accumulate over the span of service of an employee. The intention is to make the employees to save for retirement, pension, etc.
In most cases, the Government (PF Board) collects this amount and keeps it in the employee's name. After an employee retires, all the contribution made by the employee along with interest is paid back to the employee. This is handled by the PF Board and the employer or company has no role to play in it.
For e.g. If my basic salary is Rs. 100/-, then I should contribute Rs. 12 as my PF. This will be deposited into my PF account. Along with my contribution, my employer also make a matching contribution of Rs. 12/- into my account. So, every month, my PF account increases by Rs. 24 (12-my contribution, 12-my employer's contribution) till the end of service.
Any salary revisions will automatically lead to changes in the PF contribution. However, if the salary changes are done to components that are not a part of basic salary, there is no impact.
According to the PF rules, all employees who draw a PF Basic of less than 7500 must contribute to PF. This is mandatory.
For employees having PF Basic more than 7500, the deduction/contribution is voluntary. If they want, they can opt for the deduction. Else, there need not be any deduction (from both the employee and employer perspective).
But in most companies, PF is applicable to all employees.
I think this answers your question
Thanks
Nivya
From India, Madras
In most cases, the Government (PF Board) collects this amount and keeps it in the employee's name. After an employee retires, all the contribution made by the employee along with interest is paid back to the employee. This is handled by the PF Board and the employer or company has no role to play in it.
For e.g. If my basic salary is Rs. 100/-, then I should contribute Rs. 12 as my PF. This will be deposited into my PF account. Along with my contribution, my employer also make a matching contribution of Rs. 12/- into my account. So, every month, my PF account increases by Rs. 24 (12-my contribution, 12-my employer's contribution) till the end of service.
Any salary revisions will automatically lead to changes in the PF contribution. However, if the salary changes are done to components that are not a part of basic salary, there is no impact.
According to the PF rules, all employees who draw a PF Basic of less than 7500 must contribute to PF. This is mandatory.
For employees having PF Basic more than 7500, the deduction/contribution is voluntary. If they want, they can opt for the deduction. Else, there need not be any deduction (from both the employee and employer perspective).
But in most companies, PF is applicable to all employees.
I think this answers your question
Thanks
Nivya
From India, Madras
May be they are just starting the carrier or else in certain companies they promote accounts people to take care of HR and those people may not be knowing the basics. The profession is totally different.
BKC1965
From India, Mumbai
BKC1965
From India, Mumbai
I think BKC1965 is into some relations with Mr.K.R.Shanmugham thats why there thinking is of the same level. Please i will request you to come out of ego and share your precious knowledge with us, we are not here to show anyone down. I hope you understand.
From India, Ludhiana
From India, Ludhiana
Hi sir,
According to PF act the company whose have ing more or equal to 20ppl will deduct pf from employee salary,some companies who have 18 pll also deducting pf after the company get pf account from PF board the 12pecentage of employee basi salary will be deducted and other 12 pecen will add by employer But here some companies are not contributing this much for example we take reliance store it wlii deduct 12 %from employee but it add only 8 % from company side its because when the establishment of company it consist act&memorandum wat ever the company mention in that act it ll be given to employee but some times employer will do some adjustments so review ur company policy once
Its as per my knowledge If i am wrong pls let me know
From India, Hyderabad
According to PF act the company whose have ing more or equal to 20ppl will deduct pf from employee salary,some companies who have 18 pll also deducting pf after the company get pf account from PF board the 12pecentage of employee basi salary will be deducted and other 12 pecen will add by employer But here some companies are not contributing this much for example we take reliance store it wlii deduct 12 %from employee but it add only 8 % from company side its because when the establishment of company it consist act&memorandum wat ever the company mention in that act it ll be given to employee but some times employer will do some adjustments so review ur company policy once
Its as per my knowledge If i am wrong pls let me know
From India, Hyderabad
Thanks K2s. One more point with regard to the relationship between IT and PF:
As per Indian Tax laws, any contribution done by the employee towards PF, can be considered as an investment under Chapter 6. This can help reduce the tax liability of the employee while offering a decent return on investment.
Thanks
Nivya
From India, Madras
As per Indian Tax laws, any contribution done by the employee towards PF, can be considered as an investment under Chapter 6. This can help reduce the tax liability of the employee while offering a decent return on investment.
Thanks
Nivya
From India, Madras
Hai
I have observed the discussion. I have one doubt. It is clear that a company can include the employees into the PF Act once the employee strength reaches to 20.
But my question is should all the employees be permanent or there may be trainees in the number of 20 employees.........
From India, Bangalore
I have observed the discussion. I have one doubt. It is clear that a company can include the employees into the PF Act once the employee strength reaches to 20.
But my question is should all the employees be permanent or there may be trainees in the number of 20 employees.........
From India, Bangalore
Hai, The question raised because as per to PF Act Trainees are exempted from the PF facility
From India, Bangalore
From India, Bangalore
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PF not applicable on CTC 18.3.2014.pdf