Hi All,
I have been made to understand that there is a rule that says that if a company has the policy that it will pay maximum 780 as employers contribution to PF then it has to be made applicable to all employees and there can be no exceptions. The problem arises when we employ new people who would like higher amount to be deposited as it saves them tax. I would like to present this case to my MD and would like to know if there is any mention of the same in the PF Rule book. if yes can you please provide me with the section under which such a notification is present.
Thank you all and hoping for early reply.
Vinit
From India, Delhi
I have been made to understand that there is a rule that says that if a company has the policy that it will pay maximum 780 as employers contribution to PF then it has to be made applicable to all employees and there can be no exceptions. The problem arises when we employ new people who would like higher amount to be deposited as it saves them tax. I would like to present this case to my MD and would like to know if there is any mention of the same in the PF Rule book. if yes can you please provide me with the section under which such a notification is present.
Thank you all and hoping for early reply.
Vinit
From India, Delhi
As per the norms of the pf rules the employer need not contribute over and above the limit of RS.780. In that also Rs 541 goes to A/C No.10 and rest to employee account. In case of the employees who are there on CTC basis it does not make difference. You can suggest the Mgt to hire the people on ctc basis so that both employer and employee share comes in the package agreed.
Beside above there is provision in the act that the employee can increase his share of contribution above 12% for which a letter in the prescribe format is to be submitted to the pf office. Thus the employee can get the benifit of tax exemption, without effecting the Employer contribution.
regards
Prabhakar Rao.M
From India, Delhi
4Beside above there is provision in the act that the employee can increase his share of contribution above 12% for which a letter in the prescribe format is to be submitted to the pf office. Thus the employee can get the benifit of tax exemption, without effecting the Employer contribution.
regards
Prabhakar Rao.M
From India, Delhi
Dear Mr. Prabhakar,
thank you for the valuable info. The problem here is of old employees. The news ones are being recruited on CTC basis. so there is no issues with their PF. But for the old employees we can continue the 780/- contribution without any compliance issues? right?.
rgds
vinit
From India, Delhi
thank you for the valuable info. The problem here is of old employees. The news ones are being recruited on CTC basis. so there is no issues with their PF. But for the old employees we can continue the 780/- contribution without any compliance issues? right?.
rgds
vinit
From India, Delhi
Dear Vinit
In case the employer is paying over and above 780/- they can stop paying beyond the ceiling of 6500/-(ie 12% or Rs. 780/-). It cannot be compulsion from employer point of view to contribute more. Regarding the old employees they can pay more to avoid the tax issue but employer wont be under any obligation to pay more.
Rgds
Prabhakar Rao.M
Mgr-HR
From India, Delhi
In case the employer is paying over and above 780/- they can stop paying beyond the ceiling of 6500/-(ie 12% or Rs. 780/-). It cannot be compulsion from employer point of view to contribute more. Regarding the old employees they can pay more to avoid the tax issue but employer wont be under any obligation to pay more.
Rgds
Prabhakar Rao.M
Mgr-HR
From India, Delhi
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PF query.doc
Employees' PF Appellate Tribunal Procedure Rules 1997.pdf