Anju
asked
My CTC is 4 Lakhs ,Fixed component is 3.20 Lakhs and Variable component is 80 thousand. PF which will be deducted from Fixed component(3.20L) is shown as 19200. Income tax is 200/month. I was supposed to be receiving 25k but it came down to 23.5k because HR told me that PF will be deducted twice from my fixed component. ie. 1600*2 = 3200.
0
0
Answer Now
Comment
Report
3
Answers
veeru
answered
Thats's correct. EPF rule says 12% of your basic + allowance will be deducted from your gross salary and employer will match the same amount (which is included in CTC). So basically 24% of your (basic+allowance) deducted and deposited to your EPF account.
For ex:
Basic = 8000
Dearness allowance = 2000
PF (employee contri.) = (8000+2000)*12/100 =1200
PF (employer contri.) = (8000+2000)*12/100 =1200
So total PF deduction = 1200+1200=2400
Important Note – Preparing for CA Final?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below –
For any questions Request A Call Back
Vandana Choudhari
answered
Dear Anju, this is a bit confusing part for most of the employees. But this is only the practise which is carried out by all the companies. Both the employer and employee contrubution form part of CTC. This is the reason I have specified both of them in ur last question about components of CTC. Employer counts every single rupee spent on his employee in his CTC. And regarding ur contribution, you are given a choice on the amount of contribution u want to make as ur part. Thus, both form part of ur CTC.
CHITRANJAN AGARWAL
answered
Dear Anju,
Yes, HR is correct. CTC stands for cost to the company. Cost to the company include all cost i.e. contribution of employer to employee provident fund. in your case employer is correct.
Employer shall be liable to deduct both pf contribution i.e. Emp[loyer and employee contribution.
However you can reduce your tax liability by making tax planning.
Any other query feel free to contact us.
Writer
CA Chitranjan Agarwal
