07 February 2010
The PF Act lays down the following provision > 1) If the basic salary of the employee is less than Rs.6500 p.m then the employer has to deduct PF @12% from the emplyees salary and the employer will also contribute the same amount towards PF. 2) If the salary of the employee is above Rs.6500, then it is not mandatory for the employer to deduct PF. However, employee and employer can mutually agreed and can deposit PF voluntarily.
However, in case of stipend, my knowledge says that it is not termed as basic salary and thus no pint arises for PF. (Experts please confirm this point).
13 February 2010
Sir, My doubt is that " In an organization ( may Company / firm etc),have 40 staffs and number of training persons (trainees).The organisation deducts PF for 40 staffs only. 1.Is it mandatory to deduct PF for trainees? 2.How can differentiate stipend and salary?
CAclubindia
