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+--- Thread: Minimum rate of deduction of provident fund (/thread-minimum-rate-of-deduction-of-provident-fund)
Minimum rate of deduction of provident fund - i am a CA student - 11-25-2010
Every company may have its own provident fund policy.
However, Law rstrict the minimum limit of provident fund deduction ?
Pleae give me the referrence.
My views are that the laws restricts to have PF policy to deduct not less than 8.33 % of basic salary.
Please guide me with propoer reference of law.
- i am a CA student - 12-28-2010
Anybody ???
- Salmancert - 01-06-2011
There is no thing as 8.33% Limit
- Salmancert - 01-06-2011
However, The law restricts the Maximum contribution by employer to be not more that 1/10th of the Salary (10%). Amounts contributed in excess of this limit will be included in his Income, and therefore subject to Tax. Since Employer and employees contribution must be equal, therefore the Maximum untaxed limit is 10@ each
However, if the employee's and employer agree to pay tax on the additional PF contribution by employer then they may choose whatever limit they want.
Hope This solved your concern
(ReferenceIncome Tax Ordinance 2001, Schedule 6, Para 3
Income Tax Rules 2002, Chapter XV, Para 97)
If you have any Provident Fund Query, Please ask, I'll be glad to reply
- i am a CA student - 01-07-2011
You means that any companu may have its policy to deduct any percentae of basic salry even 1 or 2 percent.
Is it?
- zahid 13456 - 01-08-2011
AoA!
According to ITO 2001
ITO provides exemption for tax levies on employees contribution to Approved provident fund
LOWER of
100,000 or 10% of basic salary +Dearness allowance
Interest paid by employee to APF is exempt
LOWER of
1/3 b.salary or paid on rate 16%
Any contribution towards unapproved PF have no exemption, totally taxable.
REGARDS,
ZAHID
- Salmancert - 01-08-2011
Yes it is, no minimum