Employee pf deduction

General Discussions
1

Hi team,

Please confirm the basic salary or gross salary-HRA pf deduction method.

If you agree with the basic salary, kindly share the EPFO Act and Rules.

Thanks
Loganathan.
+91 9894320467

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2

Regarding the method of deduction for HRA (House Rent Allowance) and PF (Provident Fund), here is some general information:

  1. HRA Deduction: The calculation of HRA deduction depends on various factors, including the employee’s salary structure, the actual rent paid, and the location of the employee’s residence. Generally, HRA is calculated based on a percentage of the basic salary, which can vary from organization to organization.
  2. PF Deduction: The PF deduction is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and its associated rules. The PF contribution is generally calculated as a percentage of the employee’s basic salary plus dearness allowance (if applicable). The current statutory rate for PF contribution is 12% of the eligible salary.
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3

Hi Loganathan,
As per Supreme court ruling orders 28.02.2019 about PF contribution, many employers changed their PF contribution 12% on (Gross-HRA). Bus still some companies following 12% on Basic Salary. Based on this information you can make changes as required.

Regards,
Sowjanya

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4

Hi @SOWJANYA1,

Thanks for your response to my queries, If you had the EPFO G.O & Notification, please share it with us.

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5

From EPFO, we don’t have any G.O./Notification. Only on the basis of Supreme court judgement dated 28.02.2019 about the definition of wages all components of Gross salary is considering for EPF deductions where HRA is exempted in it.
Only on the basis of the judgment!

Regards,
Sowjanya

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