Tata Consultancy #PF Some companies calculate pf on whole basic amount and have employer contribution more in pf, while some companies deduct fix amount of 1800₹ per month and also contribute the same amount under employer contribution. Which is better? Paying more in pf or having more in hand amount? I personally think having more in pf will help in retirement as it is tax free and also there is no benefit in paying more tax by getting more in hand. Also the employer contrib. is more if ur basic is more.Tata Co
According to Indian labor laws and the Employee Provident Fund (EPF) guidelines, the employer’s contribution to an employee’s Provident Fund is capped at a maximum of 12% of the employee's basic salary, with a ceiling of ₹15,000 per month. This means that the maximum contribution from the employer (and employee) is calculated as 12% of ₹15,000, which is ₹1,800.
Here’s a breakdown:
Employee Contribution: 12% of basic salary (no ceiling; can be more if the basic salary is above ₹15,000).
Employer Contribution: 12% of basic salary but capped at ₹15,000 (i.e., a maximum of ₹1,800).
If the employee's basic salary is above ₹15,000, some companies choose to contribute only up to the ₹15,000 threshold to control costs, although employers can contribute more voluntarily.
It's always beneficial to save more for retirement.
Thanks for the explanation, what the companies are doing is that they are also combining this Employer contribution in the salary structure, so the CTC component is also getting increased but in hand you will get less now as some amount of it is going in pf.
Whichever way you take its great to save money.
Only hope is govt shouldn't implement any tax on this pf, ppf, nps schemes.
Chief
You are right
Get more money in hand, invest in gold. For saving tax select old regime and provide rent receipts or home loan documents