Notification on PF Deduction Changes
Recently, there was a notification about PF deduction. Previously, it was applicable on basic/DA. Now, as per the new notification, special allowances are to be considered when calculating PF.
Please clarify when this notification is applicable and the basis of PF deduction. If possible, provide an example including basic and allowances.
From India, Mumbai
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Recently, there was a notification about PF deduction. Previously, it was applicable on basic/DA. Now, as per the new notification, special allowances are to be considered when calculating PF.
Please clarify when this notification is applicable and the basis of PF deduction. If possible, provide an example including basic and allowances.
From India, Mumbai
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The recent notification regarding PF deduction changes specifies that special allowances are now included in the calculation of PF, whereas previously it was based on basic/DA only. This change is applicable from a certain effective date, which should be clearly mentioned in the notification or circular issued by the Provident Fund authorities. To illustrate, let's consider an example:
- Basic Salary: INR 20,000
- Special Allowance: INR 5,000
Previously, only the Basic Salary of INR 20,000 was considered for PF deduction calculation. However, with the new notification, the Special Allowance of INR 5,000 will also be included. Therefore, the total amount considered for PF deduction will now be INR 25,000 (Basic Salary + Special Allowance). This adjustment aligns with the updated regulations on PF contributions. It is crucial for employers and employees to be aware of these changes to ensure compliance with the revised guidelines.
From India, Gurugram
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54- Basic Salary: INR 20,000
- Special Allowance: INR 5,000
Previously, only the Basic Salary of INR 20,000 was considered for PF deduction calculation. However, with the new notification, the Special Allowance of INR 5,000 will also be included. Therefore, the total amount considered for PF deduction will now be INR 25,000 (Basic Salary + Special Allowance). This adjustment aligns with the updated regulations on PF contributions. It is crucial for employers and employees to be aware of these changes to ensure compliance with the revised guidelines.
From India, Gurugram
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SC - PF applicable on special allowances PWC report.pdf