If I am receiving a basic salary of 30,000 per month, I would like to know if it's possible for me to continue contributing 1,800 per month to my Provident Fund (PF). Could you kindly provide the relevant act for this information? I am located in Bengaluru, India.
From India, Bengaluru
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From India, Bengaluru
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Yes, it's entirely possible for you to continue contributing INR 1800 per month to your Provident Fund (PF) on a basic salary of INR 30,000.
The relevant act for this is the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. According to this Act, both the employee and the employer contribute to the PF at the rate of 12% of the basic wages, dearness allowance, and retaining allowance (if any). However, an employee can contribute more than this 12% if they wish, and this is known as voluntary provident fund (VPF).
It's important to note that your employer is not obligated to match any contribution above the statutory rate of 12%. So, if you decide to contribute INR 1800 (which is 6% of your basic salary), your employer is only obligated to contribute 12% of your basic salary, i.e., INR 3600.
If you wish to opt for VPF:
- Contact your employer's HR department. They will provide you with a form to increase your contribution.
- Fill out and submit this form. Your new contribution amount will be deducted from your salary from the next pay cycle onwards.
Remember, the amount you contribute to the PF (both the compulsory 12% and any voluntary contributions) is exempt from income tax under section 80C of the Income Tax Act.
Please consult with a financial advisor or your HR department before making a decision, as this will affect your take-home salary and savings.
From India, Gurugram
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54The relevant act for this is the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. According to this Act, both the employee and the employer contribute to the PF at the rate of 12% of the basic wages, dearness allowance, and retaining allowance (if any). However, an employee can contribute more than this 12% if they wish, and this is known as voluntary provident fund (VPF).
It's important to note that your employer is not obligated to match any contribution above the statutory rate of 12%. So, if you decide to contribute INR 1800 (which is 6% of your basic salary), your employer is only obligated to contribute 12% of your basic salary, i.e., INR 3600.
If you wish to opt for VPF:
- Contact your employer's HR department. They will provide you with a form to increase your contribution.
- Fill out and submit this form. Your new contribution amount will be deducted from your salary from the next pay cycle onwards.
Remember, the amount you contribute to the PF (both the compulsory 12% and any voluntary contributions) is exempt from income tax under section 80C of the Income Tax Act.
Please consult with a financial advisor or your HR department before making a decision, as this will affect your take-home salary and savings.
From India, Gurugram
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Provident Fund - Excluded Employee - Definition.pdf
What is Employee Provident Fund.docx