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PF QUERY URGENT

CA.Sonia (professional) (517 Points)

18 January 2010

Sir, Employer contribution does it form part of ctc ( is it inclusive).

2.Treatment of employer contribution in his books of a/c's.

3.Is it a compulsion for employer to contribute for EDIL?

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9 Replies

(Guest)

in my opinion employers contribution is not included in ctc

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FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 19 January 2010

Employer's contribution to PF is contribution from his own pocket and nothing to do with the employees salary.

Employer's contribution can be claimed as expense and must be debited to Profit & Loss Account.

And it is compulsory to contribute towards EDLI charges.

ARIJIT DASH (Manager Finance) (28 Points)
Replied 19 January 2010

Employer Cn to PF forms part of CTC(cost to company) as it is a expense borne by the company.

Employer Cn is treated as expense in books of account

Employees deposit link insurance is a compulsion to contribute and is a expense thts why when we calculate CTC we take it as 13.61% i.e. 12% employer cn + 10% PF admin charge on employer cn+1% edli on edli gross and 2% inspection charge on edli.

hope this clarifies. let me know if u need more in detail.

1 Like

Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 19 January 2010

yea Agree with Mr. Arijit.. Emplyr contribution will forms part of CTC coz it will be a cost for a company.

regards,

ratan

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 19 January 2010

Originally posted by : ARIJIT DASH
	Employer Cn to PF forms part of CTC(cost to company) as it is a expense borne by the company. Employer Cn is treated as expense in books of account Employees deposit link insurance is a compulsion to contribute and is a expense thts why when we calculate CTC we take it as 13.61% i.e. 12% employer cn + 10% PF admin charge on employer cn+1% edli on edli gross and 2% inspection charge on edli. hope this clarifies. let me know if u need more in detail.

agreed with the above reply

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CA.Sonia (professional) (517 Points)
Replied 19 January 2010

Thanks to all and can you throw light on computaion of 1.Employer contribution if Basic pay exceeds 6500 and can we follow any three methods or any specific should be followed? Do reply sir.

K.N.BADRINATH (SENIOR ACCOUNTANT) (22 Points)
Replied 21 January 2010

sonia,

To your query regarding employer's contribution in respect of basic pay exceeds Rs.6500, it goes like this.

The employer is only oblige to make his part of contribution for an basic amount <=6500. if any thing exceeds this threshold limit, then the burden of contributing is solely rests on the employee, as he can volantarily contribute to the scheme. I hope this is clarified.

venkata harish (student) (22 Points)
Replied 09 July 2010

What is the penalty imposed on the employer, if PF collected from employees, but the same is not paid to Governament?

Nikhil Sawant (Accounts & Audit Manager) (48 Points)
Replied 14 April 2012

Originally posted by : ARIJIT DASH

Employer Cn to PF forms part of CTC(cost to company) as it is a expense borne by the company.
Employer Cn is treated as expense in books of account
Employees deposit link insurance is a compulsion to contribute and is a expense thts why when we calculate CTC we take it as 13.61% i.e. 12% employer cn + 10% PF admin charge on employer cn+1% edli on edli gross and 2% inspection charge on edli.
hope this clarifies. let me know if u need more in detail.

Mr. Arijit Dash

Thanks for your valuable information.

Can i get written provision or written material on the same in any act which clarifies the situation in more details. Reply soon.