Hello, This is Amit Rajawat, Currently I am working with RCS as a HR Executive. I want to know that when does the PF deduct on Bonus & Allowances and what is the rule. Please help me!
From India, undefined
From India, undefined
Dear Amit,
I would request you to make a comparative study of the term "basic wages" u/s 2(b) of the EPF Act,1952 with that of the term "salary or wage" u/s 2(21) of the Payment of Bonus Act,1965 with special reference to the excluded items under both the definitions.
Sub-clause(ii) of Clause (b) of Section 2 of the EPFA,1952 excludes bonus from the definition while section 6 of the same Act specifically states that the contribution payable shall comprise of the basic wages, dearness allowance and retaining allowance if any only.
Similarly, clause (iv) of Section 2(21) of the PBA,1965 excludes any bonus from the term "salary or wages".
Since bonus is an additional payment payable at the end of the year based on the performance of the establishment it cannot be construed as an allowance payable with the wages of the employee at the end of the wage period.
My presumption is that the recent judgment of the Supreme Court prompted you to raise this question. In my opinion, the ratio decidendi of the hon'ble Supreme Court of India in Vivekananda Vidyamandir Case cannot be applied to bonus on par with other allowances for determining the EPF contribution for the reasons that bonus is not an allowance and there is simultaneous exclusion of bonus from the term wages under both the EPFA1952 and the PBA,1965..
From India, Salem
6016I would request you to make a comparative study of the term "basic wages" u/s 2(b) of the EPF Act,1952 with that of the term "salary or wage" u/s 2(21) of the Payment of Bonus Act,1965 with special reference to the excluded items under both the definitions.
Sub-clause(ii) of Clause (b) of Section 2 of the EPFA,1952 excludes bonus from the definition while section 6 of the same Act specifically states that the contribution payable shall comprise of the basic wages, dearness allowance and retaining allowance if any only.
Similarly, clause (iv) of Section 2(21) of the PBA,1965 excludes any bonus from the term "salary or wages".
Since bonus is an additional payment payable at the end of the year based on the performance of the establishment it cannot be construed as an allowance payable with the wages of the employee at the end of the wage period.
My presumption is that the recent judgment of the Supreme Court prompted you to raise this question. In my opinion, the ratio decidendi of the hon'ble Supreme Court of India in Vivekananda Vidyamandir Case cannot be applied to bonus on par with other allowances for determining the EPF contribution for the reasons that bonus is not an allowance and there is simultaneous exclusion of bonus from the term wages under both the EPFA1952 and the PBA,1965..
From India, Salem
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls