If an employer out of ignorance had deducted and deposited PF on the gross salary instead of basic salary and has been doing this since 1991. What can be done?
From India, Jaipur
From India, Jaipur
If that Gross Salary is more than Rs 15000, then you can bring it back to Rs 15000. At the same time, if you want to make it to an amount less than Rs 15000 you will face enquiry. This is because PF is payable on Basic salary which is equal to and nothing but the gross salary. As per section 12 of the EPF and MP Act you cannot reduce the salary (PF qualifying salary). However, the PF authorities cannot DEMAND any contribution on salary above Rs 15000. Therefore, if the employer has been contributing PF on an amount more than Rs 15000, say on Rs 20000, but wants to restrict it to 125 on Rs 15000, he can do so and that act of reducing the PF contributing salary from 20000 to 15000 will not amount to violation of section 12 of the Act (ref: Marathwada Gramin Bank Karmachari Sanghatana Vs Management of Marathwada Gramin Bank)
If you have been paying contribution on an amount higher than Rs 15000 and you want to make it only on the basic salary that you have kept for your own sake, say, Rs 8000, then you will have to establish why this is done. You cannot say that your employees' basic pay is Rs 8000 and the remaining part of salary paid belong to allowances which are excluded from wages because the only exclusion available in the definition of wages is HRA. But when HRA is a part of salary and is given to all employees irrespective of whether they are residing in rented house or not, the exclusion will not be permitted.
From India, Kannur
4193If you have been paying contribution on an amount higher than Rs 15000 and you want to make it only on the basic salary that you have kept for your own sake, say, Rs 8000, then you will have to establish why this is done. You cannot say that your employees' basic pay is Rs 8000 and the remaining part of salary paid belong to allowances which are excluded from wages because the only exclusion available in the definition of wages is HRA. But when HRA is a part of salary and is given to all employees irrespective of whether they are residing in rented house or not, the exclusion will not be permitted.
From India, Kannur
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Employer-PF-res trict to wages of Rs 6500.pdf