NEW DELHI: The Supreme Court ruling on provident fund contribution by employers and workers is unlikely to impact those with basic wage and special allowances above Rs 15,000 a month, but may result in the next outgo in case of foreigners running in India. “The order can be applicable to those with a basic wage and allowances as much as Rs 15,000 as PF contribution. Beyond that, PF isn't mandatory,” said a former central provident fund commissioner (CPFC).
Ok Ok Jalan, any other CPFC, said that the order have been issued as many employers weren't deducting PF past the statutory minimal salary. “So, we urged enforcement motion in circumstances where the entire payout was once upper however the basic was once decrease and was once the basis for PF deduction,” he said. As a result, the order may result in a decrease take house wage for some workers however the quantity can be much less.
Kuldip Kumar, a partner at consulting firm PwC India cited a case between Marathwada Gramin Bank workers and the control, where the Supreme Court had ruled that PF government may no longer power an employer to contribute past the statutory legal responsibility and PF government didn't go for review petition.
“This ruling lays down the take a look at for except a specific allowance from definition of ‘wages’ for PF contribution, where it's variable or incentive in nature and isn't paid across the board to all workers in a specific category or paid particularly to people who availed the chance. Where this sort of allowances are to be integrated in wages by distinctive feature of this ruling and wages transcend Rs 15,000 a month, whether or not PF government will power employers to contribute in this upper amount? In May, 2014, PF government issued instructions to its box officials that they must no longer power employers to contribute over and above the statutory salary ceiling (of Rs 15000) following decision of the apex court within the Marathwada Gramin Bank case,” he added.
While special allowances have been a cause for heartburn for plenty of workers, who imagine that their PF payments and post-retirement financial savings are impacted, a number of do not want upper deductions as it could scale back their takehome wage. “There is all the time a dilemma,” said Jalan.
Ok Ok Jalan, any other CPFC, said that the order have been issued as many employers weren't deducting PF past the statutory minimal salary. “So, we urged enforcement motion in circumstances where the entire payout was once upper however the basic was once decrease and was once the basis for PF deduction,” he said. As a result, the order may result in a decrease take house wage for some workers however the quantity can be much less.
Kuldip Kumar, a partner at consulting firm PwC India cited a case between Marathwada Gramin Bank workers and the control, where the Supreme Court had ruled that PF government may no longer power an employer to contribute past the statutory legal responsibility and PF government didn't go for review petition.
“This ruling lays down the take a look at for except a specific allowance from definition of ‘wages’ for PF contribution, where it's variable or incentive in nature and isn't paid across the board to all workers in a specific category or paid particularly to people who availed the chance. Where this sort of allowances are to be integrated in wages by distinctive feature of this ruling and wages transcend Rs 15,000 a month, whether or not PF government will power employers to contribute in this upper amount? In May, 2014, PF government issued instructions to its box officials that they must no longer power employers to contribute over and above the statutory salary ceiling (of Rs 15000) following decision of the apex court within the Marathwada Gramin Bank case,” he added.
While special allowances have been a cause for heartburn for plenty of workers, who imagine that their PF payments and post-retirement financial savings are impacted, a number of do not want upper deductions as it could scale back their takehome wage. “There is all the time a dilemma,” said Jalan.
PF ruling may not cover salary over Rs 15k/month
![PF ruling may not cover salary over Rs 15k/month]()
Reviewed by Kailash
on
March 01, 2019
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