PF deduction: Supreme Court Decision – Practical Examples

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Effects of Supreme Court Judgement in the matter of Surya Roshini Ltd Dated 28-02-2019

Part -2 of 2

Kapish Saluja | Labour Law Consultant | Mumbai

This is part 2 of the article. You can read Part 1 here

https://blog.proactly.in/2019/05/04/pf-deduction-on-gross-salary-supreme-court-decision/

Several charts are being given below, enumerating the various probabilities of the payments made by an employer and the effect of judgment of the Supreme Court on such wage structure, viz-a-viz the existing liabilities towards Provident fund

Assumptions

Assuming that the Minimum Wage for Industry under Minimum Wages Act is  : Basic Rs. 7000 . Dearness Allowance Rs. 3000. Total Rs. 10,000

Employers having 50 or more than 50 employees in State of Maharashtra are covered under Maharashtra Minimum House Rent Allowance Act, whereby it has to pay not less than 5% of wages as HRA

Wage Structure A

Wage Structure Existing Contributions paid under PF Contributions
payable
under
PF as per Supreme
Court judgment

Basic Wage – Rs. 5000
HRA – Rs. 2500
Conveyance – Rs. 2500
CCA – Rs. 1000     Total – Rs. 11000

Only on Rs. 5000
(Basic)

On Rs. 8500/- (Basic + Conveyance + CCA)

Wage Structure B

Wage Structure Existing
Contributions
paid
under PF
Contributions
payable
under PF as
per Supreme
Court judgment

Basic Wage – Rs. 7000
HRA – Rs. 3000
Conveyance – Rs. 3000
Total – Rs. 13000

Only on Rs. 7000
(Basic)

On Rs. 10000
(Basic + Conveyance )

Wage Structure C

Wage Structure Existing 
Contributions  paid
under PF
Contributions 
payable under  
PF as per 
Supreme Court 
judgment

Basic Wage – Rs. 8000
HRA –
Rs. 4000
Conveyance – Rs. 3000
Total – Rs. 15000

Only on Rs. 8000 (Basic)

On Rs. 11000 (Basic + Conveyance )

Wage Structure D

Wage Structure Existing  Contributions  paid under PF Contributions  payable under  PF as per  Supreme Court  judgment

Basic Wage – Rs. 10000 HRA – Rs. 5000 Conveyance – Rs. 4000 Total – Rs. 19000

Only on Rs. 10000 (Basic)

On Rs. 14000 (Basic + Conveyance )

Wage Structure E

Wage Structure Existing  Contributions  paid under PF Contributions  payable under  PF as per  Supreme Court  judgment

Basic Wage – Rs. 10000 HRA – Rs. 5000 Conveyance – Rs. 3000 CCA – Rs. 3000 Total – Rs. 21000

Only on Rs. 10000 (Basic)

On Rs. 15000 (Basic + Conveyance + CCA) (Since maximum limit is Rs. 15000, it shall be paid on Rs. 15000 and not on Rs. 16000 )

Wage Structure F – In case of new entrant who, gives Form 11

Wage Structure Existing  Contributions  paid under PF Contributions  payable under  PF as per  Supreme Court  judgment

Basic Wage – Rs. 10000 HRA – Rs. 5000 Conveyance – Rs. 3000 CCA – Rs. 3000 Total – Rs. 21000


No contributions under PF since Basic + Conveyance + CCA exceeds Rs. 15000