EPF
Am working in a firm but they are only taking Basic and DA for calculation EPF 12%.Actually Basic+DA+Allowance should be taken to calculate epf right? more
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the circular was later withdrawn . it was contested by many employers organisation . Now it is Basic plus DA . but companies can restrict to 15000// per month . above it they may not pay contribution .hence maximum of 1800// per month . many pay on full basic plus DA . more
Mar 31
so i think ...allowances except HRA,Bonus,Gratuity,Commission,Driver beta etc are eligible for calculating EPF. more
Mar 30
Below is the November 30th 2012 circular regarding the above said issue. “Basic wages by its own definition encompasses all the payments except the specified exclusions. All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as part of the basic wages. The confusion in definition of wages (and hence the issue of splitting of wages) primarily arises from the expression commission or any other similar allowance payable to the employee” in Section 2(b) (ii) of the Act as “commission” and “any other similar allowance” are read as two separate expressions and hence “any other allowance” is read as an omnibus exclusion, thereby encouraging the subterfuge of splitting of wages to exclude the PF liabilities. The expression “commission or any other similar allowance payable to the employee” is one continuous term meaning commission or any other “commission” like allowance by whatever nomenclature referred. Thus “basic wages” is subject to exclusions expressly referred to in the above definition and no other.” Now let us look at EPF Act 1952 Section 2(b) ii (b) “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include- (i) the cash value of any food concession; (ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; more
Mar 30
For deduction of provident fund contributions salary means basic + DA and your employer is right. Allowances which comes under the category of perks need not be considered for the purpose of deduction of PF. Over time allowance, if any, is also not considered. more
Mar 30
