Allowance in Salary will also included in PF deducation

Under the Ministry of Labour and Employment It has been directed that according to new regulation PF(Provident Fund) of a employee should be deducted form  of sum total of  the basic pay and allowances . The new circular will cut the decease the salary of the employees. but that PF amount will  pleasure with you .It will increase the amount of PF deduction but at the same time it same amount will be contributed by Employer which will ultimately help employee in long run

Internal Review of the EPFO ​​in Mumbai on November 30, after meeting all EPF offices across the country it is circular. So far employee contribution is done as   twelve per cent of the basic pay and DA . Following the release of the new circular the  companies who  being manipulate in employee basic salary and break it into different allowance to reduce PF amount will now under pressure . Now for calculating employee PF Basic and other allowance will be added . That means Convenace, medical, education etc these will be the part of PF calculation

Suppose a person's gross salary is Rs 33. It's basic salary 25 thousand, 5 thousand and night shift allowance allowance convenyance allowance as 3 thousand .In normal case  PF contributions on basic pay at the level of Rs 25,000 is made that means his PF contribution will be 6000. But according to the new circular allowances are also  attached to the Basic and then PF contribution  will be calculated which will come around 7,920

This nearly 960 bucks in your pocket and the salary will decrease. If there is no employer's contribution then there will deduction  of Rs 1920 from salary

According to Top government officials,that merely issuing guidelines by Former Central Provident Fund commissioner (CPFC) RC Mishra triggered a controversy by issuing a circular on his last day in office has no relevance; instead amendment in the EPF Act by Parliament is the only way to enforce new norms for PF contributions.

BP Pant, director, labour and employment with the industry body Federation of Indian Chambers of Commerce and Industry (Ficci) said, "EPFO should make amendments to EPF Act and bring in new norms for PF contribution."

Pant added, "It is a subject of interpretation. The former CPFC issued guidelines to regional provident fund commissioners for widening the ambit of PF contribution and adding in other allowances which are at present not calculated for PF contributions."

Pant said: "It is good that the government wants to go ahead with it but by merely issuing guidelines, it would only lead to harassment of employers and lead to court cases. The matter is already subjudice before the Madras High Court and the Supreme Court besides other Courts".

The contribution envisaged under Section 6 with notification dated April 9, 1997, and para 29 of the EPF Scheme specifies the rate of contribution under the EPF Act as 12 per cent