We have come across a situation. Currently, we are contributing PF on the minimum scale, i.e. INR 1,800 (each for employer & employee) since the inception of the company. Now, a certain number of employees (approx. 15%) are demanding to contribute 12% PF on full basic by the employee and employer, as that was the practice in their old organisation. By doing this, they could save more for retirement corpus.
Advice required from the community:
- Can we have a mix of both, those who want to contribute full 12% can opt and rest others can restrict their PF contribution to INR 1,800? - This is a preferred option as many of them want more in-hand salary.
- Can we change company policy to 12% on full basic for all employees from the next financial year? Do we need to inform the PF department for a policy change?
Note: We have already provided them with the option of VPF; however, they are demanding to increase employer contribution as well to enjoy more income tax benefit.
Looking forward to your insight.
I really appreciate any help you can provide.