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pf on leave encashment

rahul (CA Final student) (76 Points)

20 June 2008

pls let me know wether PF needs to be deducted on leave encashment amount..? also let me know any refernce or circular in this regards if any...

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(Guest)

No, since leave encashment is a perquisite and not salary.

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Anurag (dcfds) (20 Points)
Replied 20 June 2008

Practically companies do deduct PF from the leave encashment.

Regards

Anurag

Mahesh Paryani (Chartered Accountant) (365 Points)
Replied 20 June 2008

according to PF act pf is to be diducted on basic salary plus dearness allowance plus commission if forming a part of turnover since leave encashment does not form a part so pf is not diducted from it

Ashley (cs) (178 Points)
Replied 20 June 2008

NO PF on Leave Encashment - Supreme court verdict ....enjoy

Central Provident Fund Commissioner Office has issued clarification regarding PF deduction on leave encashment pursuant to recent Supreme Court decision. Office has clarified that no further deduction is required to be made on leave encashment and amount deposited by employers on leave encashment as their contribution will be adjusted against future liablities of establishment if any. In view of this clarification employer is at liberty to adjust the amount already paid on A/c of leave encashment from future payments.

Ashley (cs) (178 Points)
Replied 20 June 2008

Supreme Court in the case of Manipal Academy of Higher Education v/s RPFC decided on 12.3.2008 has held that leave encashment is not part of basic pay for the purpose of PF and hence PF is not applicable on the same

Attached File : 54 supreme court no pf on leave encashment 12.3.08.doc downloaded: 402 times

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