Dear Sirs
This is regarding PF contribution and recent supreme court
PF contribution as per Feb 2019 Supreme court order,
Do we need to calculate the PF of 12% for all salary components (Basic+DA+Spl allowances +Conveyances+HRA+Education Allowances +Amenties) or else Basic +DA+Spl alone.
This was questioned raised by our internal audit team,have to close the same NC
Pls support
Baskar
From India, Chennai
This is regarding PF contribution and recent supreme court
PF contribution as per Feb 2019 Supreme court order,
Do we need to calculate the PF of 12% for all salary components (Basic+DA+Spl allowances +Conveyances+HRA+Education Allowances +Amenties) or else Basic +DA+Spl alone.
This was questioned raised by our internal audit team,have to close the same NC
Pls support
Baskar
From India, Chennai
Implication of the Supreme Court Decision:
The Supreme Court Decision will have wider implications depending on individual situation. For the employees in the lower scale of emoluments where amount considered for PF contribution is lower than fifteen thousands and who receive such universal allowance, not linked to efficiently, will get lower “in hand salary” as the employer is bound to take into account such allowances while deducting provident contributions. The employer himself will have to shell out more money in the form of employer’s contribution. Such employees will be able to accumulate larger corpus in their provident fund account at the time of their retirement.
For employees who are in receipt of higher salary with allowances but the contribution has been pegged at the base amount of fifteen thousand will not be affected by this supreme court decision. However for the employees in higher salary bracket and whose contribution is computed with reference to such higher amount of salary, the contribution toward provident fund will go up if they are in receipt of such allowance and which are not considered hitherto for PF contribution.
So in case your Cost to the Company (CTC) includes the employer’s contribution as well and the amount of contribution is going to go up due to Supreme Court Decision as discussed, your salary in hand will reduce due to increase in deduction from your Salary as well as your salary coming down to make for increased quantum of employer’s contribution.
From India, Hyderabad
9The Supreme Court Decision will have wider implications depending on individual situation. For the employees in the lower scale of emoluments where amount considered for PF contribution is lower than fifteen thousands and who receive such universal allowance, not linked to efficiently, will get lower “in hand salary” as the employer is bound to take into account such allowances while deducting provident contributions. The employer himself will have to shell out more money in the form of employer’s contribution. Such employees will be able to accumulate larger corpus in their provident fund account at the time of their retirement.
For employees who are in receipt of higher salary with allowances but the contribution has been pegged at the base amount of fifteen thousand will not be affected by this supreme court decision. However for the employees in higher salary bracket and whose contribution is computed with reference to such higher amount of salary, the contribution toward provident fund will go up if they are in receipt of such allowance and which are not considered hitherto for PF contribution.
So in case your Cost to the Company (CTC) includes the employer’s contribution as well and the amount of contribution is going to go up due to Supreme Court Decision as discussed, your salary in hand will reduce due to increase in deduction from your Salary as well as your salary coming down to make for increased quantum of employer’s contribution.
From India, Hyderabad
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