Hi all,

I have joined this new organization, where I have suddenly found that the the employer+employee contribution deduction are both done from the employee salary, which I feel is illegal & unethical.

I have tried to explain the management about this but they seem to pay no heed to this and infact are comfortable with this. Now due to this, my ctc is also affected as my take home has gone down due to employers deduction also done from my salary.

Please advise.

Regards,

Jigyasa

Dear Jigyasa,

Under section 7A of Provident fund act the details are available to you:

7A. Determination of moneys due from employers

(1) The Central Provident Fund Commissioner any Additional Central Provident Fund Commissioner any Deputy Provident Fund Commissioner any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner may by order

(a) in a case where a dispute arises regarding the applicability of this Act to an establishment decide such dispute; and

(b) determine the amount due from any employer under any provision of this Act the Scheme or the Pension Scheme or the Insurance Scheme as the case may be and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.

(2) The officer conducting the inquiry under sub-section (1) shall for the purposes of such inquiry have the same powers as are vested in a court under the Code of Civil Procedure 1908 for trying a suit in respect of the following matters namely :

(a) enforcing the attendance of any person or examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavit;

(d) issuing commissions for the examination of witnesses; and any such inquiry shall be deemed to be judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code.

(3) No order shall be made under sub-section (1) unless the employer concerned is given a reasonable opportunity of representing his case.

(3A) Where the employer employee or any other person required to attend the inquiry under sub-section (1) fails to attend such inquiry without assigning any valid reason or fails to produce any document or to file any report or return when called upon to do so the officer conducting the inquiry may decide the applicability of the Act or determine the amount due from any employer as the case may be on the basis of the evidence adduced during such enquiry and other documents available on record.

(4) Where an order under sub-section (1) is passed against an employer ex parte he may within three months from the date of communication of such order apply to the office for setting aside such order and if he satisfies the officer that the show cause notice was not duly served or that he was prevented by any sufficient cause from appearing when the inquiry was held the officer shall make an order setting aside his earlier order and shall appoint a date for proceeding with the inquiry :

Provided that no such order shall be set aside merely on the ground that there has been an irregularity in the service of the show cause notice if the officer is satisfied that the employer had notice of the date of hearing and had sufficient time to appear before the officer.

Explanation : Where an appeal has been preferred under this Act against an order passed ex parte and such appeal has been disposed of otherwise than on the ground that the appellant has withdrawn the appeal no application shall lie under this sub-section for setting aside the ex-parte order.

(5) No order passed under this section shall be set aside on any application under sub-section (4) unless notice thereof has been served on the opposite party.

Sec 12 No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension gratuity provident fund or life insurance to which the employee is entitled under the terms of his employment express or implied.

Cheers

Sunil Madan

Lets say your PF contrib from your salary is Rs. 2500/- and your CTC is 4 lacs.

The employer has to contribute the same amount which means he would contribute another 2500. This 2500*12 = 30000 would be added to your CTC and you will get an offer letter that states your CTC is 4.3 lacs.

Legally deducting both PF contributions from an employee is wrong.

Dear Jigyasa,

As Mr Thakur has mentioned it is true that both Employer & employee contribution is part of CTC ie your cost to company. each & every cost incurred on an employee is part of CTC only.

Her it seems at the time of joining you were told about CTC not your take home. Thats why this confusion is there. You should take clarity from your HR in this respect for better understanding of your take home salary.

Regards,Savita