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More Savings in PF but less net take home salary

Discussion in 'General Trading and Investment Discussions' started by real_buzz, Dec 11, 2012.

  1. real_buzz Moderator

    As per a recent circular issued by Employee provident fund organization (EPFO), allowances paid to the employees need to be added to the basic and then pf contribution would be computed. It is going to reduce the net take home.

    It is definitely a bad news for employees.

    This circular is dated November 30, 2012. It has been reviewed and has been sent across EPF offices in india.

    In the current world, a 12 % deduction (by employer and employee) is calculated based upon basic salary and few allowances only.

    Madras high court and the Madhya Pradesh high court in two separate cases had held that various allowances paid by the employer to its employees under different heads such as conveyance, education, food concession, medical, special holidays, night shift incentives, city compensatory allowance, etc., qualified as basic wages under section 2(b) of the PF Act and should be included while computing the PF contribution. This verdict was issued last year.

    This is going to affect employees in india. What your take on this?
  2. candyflower Member

    This information is very informative and useful for investors. PF is very important for everyone. All information is gave very nice tips for saving PF.

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