PF Contribution Reduced

by Vivek

Recently I have joined a new organization. Before joining it was agreed the PF contribution as per normal practice 12% on basic. But after my joining I came to know that for 12% contribution, basic is considered as Rs 6500 as ceiling amount. Now because of that my PF deduction is coming very less.

Company is adding the difference amount in Persoal Pay. Now my worry is as soon as it becomes part of salary, it will attract the tax.

When I had a discussion with HR, they are saying it will be one and the same as you can show the savings from this income in 1 Lakh slab and save the tax as PF contribution will be less.

I am not very clear about this. Can experts through some light on this ?

Thanks in advance


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