Dearness Allowance should be added or not from Provident Fund.
12-Oct-2023 (In Labour & Service Law)
I have been working in a central government department on contractual basis, they are deducting Contributory Provident Fund @ 10% on Band PAY + Grade Pay but excluding DA. I wish to know if DA should be included in this. My salary is as follows: 5830 Band Pay + 1900 Grade Pay + DA. Employer is deduction 10% on 7730 (BP +GP) i.e. 773. While i believe it should be 1693 (10% of BP + GP +DA which is at present 119%). Please advise.
The provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 read with the Provident Fund Scheme very clearly provide that Provident Fund has to be calculated by taking into account the basic wages and the dearness allowance.
Section 2(b) which defines "basic wages" and Section 6 of the Act clearly lay down the criteria for computation of the provident fund.
To support the same, there are numerous judgements of the Hon'ble Supreme court and various High Courts which have upheld that dearness allowance is a necessary component of the provident fund.
I hope I have adequately answered your query. Do let me know if there are further questions/doubts.
Regards
Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
No Comments! Be the first one to comment.
"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."