Provident fund

question is not clear. but basic funda is this;- 12% from employee salary goes to PF fund and  out of 12% of employers share 8.33 % goes to pension fund and rest add to PF fund.  Now after 10 years of sevice , one will be eligible for pension nad have less service then can be taken withdrawl benefit. OK?

Originally posted by : Rajinder Kumar
	question is not clear. but basic funda is this;- 12% from employee salary goes to PF fund and  out of 12% of employers share 8.33 % goes to pension fund and rest add to PF fund.  Now after 10 years of sevice , one will be eligible for pension nad have less service then can be taken withdrawl benefit. OK?

PF is mandatory for salary less than 6500 p.m. So, why 8.33% goes to pension fund if salary is more than 6500 and that too taking 6500 as salary?

for example, if salary is Rs20000 p.m. then 12% then 2400 is deducted from employee and Rs 1859 from employer goes to pf and 541 to pension fund.

Here amount transferred to pension fund is 8.33% of 6500

i.e. salary is bifurcated into two parts 6500+13500. If 20000 is considered then there is no question of transfer to pension fund. 

This is my question. Why such bifurcation is done?

i am still unable to understand the question. but it is explained that upto Rs 6500/- pension fund is 8.33% i.e. Rs 541/-. but if salary is above Rs 6500/- then employer and employee both have to apply in epfo jointly for paying contribution above wage ceiling so that employer can pay his 12% to whole salary.  Employer's liability is raised in these type of cases. in this situation if salary is Rs 10000/- then 8.33 will be Rs 833/-.

this forum cannot tell why a rule is there.

seek entgire noting of EPFO and Min of labour under RTI, leading to this amendment.