Provident fund

Deduction of provident fund on more than Rs.6500 is better for the employees since the employer contribution also would be more and beneficial to the employee, as a savings. Also if the Company was making higher deduction of PF (both employer and employeee), reduction at a later stage would be a loss to the employee and would not be a fair practice. An agreement may be reached between the employer and employees and PF Department's concurrence may be obtained.

Dear Mr. V. Vasudevan,

Thank you very much for your valuable comments but what if company deducted the excess PF by mistake and what if there was no agreement between the employers and the employees to deduct more PF than the ceiled amount by the PF department, don't you think that the agreement between both the party is requirement to deduct PF more than 6500 and don't you think PF department is also at fault by not accepting the form and letters?

According to the PF act ,consent letter both from employee as well as employer is required for deductions above 12% of 6500 basic.But,in practice PF Department doesn't require a consent letter.In my current organization as well as previous organization there was no submission of consent letter to deduct more than 12% of 6500.

I think the reason the consent letter is not being asked by the PF dept is that any excess deduction from the employees share will be reflected in the pays slip as well as lower take home salary of the employee and will be challenged by him.Secondly the company has no vested interest in deducting more from the employee and submit in his PF account.

In your company's case you must also have got tax benefits for the employers share  of PF as a company expenditure and this might be happening for the last few years for which returns have already been filed.So,its better just to  reduce the contribution to 12% of 6500 for the future.

Learned Mr. Vasudevan has given suitable advice. Kindly follow it.