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.