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Sanjeev Govila458 Answers  |Ask -

Financial Planner - Answered on Jan 23, 2024

Asked on - Dec 25, 2023Hindi

Sir/Madam, this is a query on provident fund. One of our employee with basic salary of 20,000 per month contributes to PF @12% = 2400/-. Now he says that he wants to contribute @12% on Rs 15,000/- = 1800/- per month as he is a excluded employee under PF Act. Is this permissible as per EPFO Act read with Scheme. Regards
Ans: Under the EPFO Act and Scheme, it’s not permissible for an employee to contribute 12% on Rs. 15,000 while earning a basic salary of Rs. 20,000, even if he/she is excluded from the PF Act.

Kindly find the reasons for the same:-

• Mandatory Contribution: The EPFO Act mandates that employees covered under the Act contribute 12% of their basic salary (up to Rs. 15,000) towards the PF. This applies even to those excluded from certain provisions.

•No Selective Contribution: The Act doesn't allow employees to selectively contribute on a lower salary amount. They must contribute based on their actual basic salary.

• Wage Ceiling: The Rs. 15,000 wage ceiling applies only to the employer's contribution, not the employee's. Employees must contribute 12% of their entire basic salary, even if it exceeds Rs. 15,000.

For further clarity on specific exclusions and contribution rules, consult with the EPFO directly via email.

Anu Krishna1047 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jan 12, 2024

Asked on - Jan 05, 2024Hindi

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