16 June 2008
On the basic salary and not the gross or net salary. for Eg. Your Gross salary is say 15000/- per month consists of
Basic Salary 60% HRA 10% City allow: 20% Other allow: 10%
Here Your basic Salary is 60% of Rs.15000/- is Rs.9000/-, to which PF is applicable.
However there is a cieling of Rs. 6500/- maximum for the calculation of PF.Deduction of PF of a Person having basic salary over Rs. 6500/- is only the amount calculated on Rs.6500/- and not on the total basic.
You can obtain special permission from the PF department for deduction on actual basic salary for the persons having basic salary over Rs. 6500/-
CAclubindia
