I’m working in a central government department on contract, and they’re deducting 10% from my salary for the Provident Fund. They’re calculating it only on my Band Pay and Grade Pay, leaving out the Dearness Allowance (DA). My current salary is around 6,000 Band Pay plus 2,000 Grade Pay, with a DA of around 120%. They’re deducting 10% of 8,000 (Band Pay + Grade Pay), which seems incorrect. Should the DA be included in the PF calculation? Is it correct to deduct only 10% of my basic pay and grade pay?

Apni Law
Apni Law
Law Forum › Category: Labour & Service › I’m working in a central government department on contract, and they’re deducting 10% from my salary for the Provident Fund. They’re calculating it only on my Band Pay and Grade Pay, leaving out the Dearness Allowance (DA). My current salary is around 6,000 Band Pay plus 2,000 Grade Pay, with a DA of around 120%. They’re deducting 10% of 8,000 (Band Pay + Grade Pay), which seems incorrect. Should the DA be included in the PF calculation? Is it correct to deduct only 10% of my basic pay and grade pay?
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Apni Law Staff asked 10 months ago

I’m working in a central government department on contract, and they’re deducting 10% from my salary for the Provident Fund. They’re calculating it only on my Band Pay and Grade Pay, leaving out the Dearness Allowance (DA). My current salary is around 6,000 Band Pay plus 2,000 Grade Pay, with a DA of around 120%. They’re deducting 10% of 8,000 (Band Pay + Grade Pay), which seems incorrect. Should the DA be included in the PF calculation? Is it correct to deduct only 10% of my basic pay and grade pay?

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Best Answer

Apni Law Staff answered 10 months ago

The Provident Fund (PF) contribution is typically calculated on your basic pay, which includes your Band Pay and Grade Pay. Dearness Allowance (DA) is generally not included in the PF calculation. Therefore, the deduction of 10% only on your Band Pay and Grade Pay seems correct based on Indian law.

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