Query- Payment of PF

Posted on July 10, 2012 by SRRF

Dear Friends,

Greetings from Hyderabad!

As you are aware that from March 2012, the PF has been made online and the organizations are expected enter one instrument/cheque/DD number for the contributions. Moreover, it becomes difficult with the banks since they also expect us to submit a single instrument for challan.

I would like to clear some of by doubts:

  1. NGOs pay salaries from FC and LC accounts. In some cases the bank for LC and FC accounts are also different. So we have to give atleast 2 instruments/cheques to bank which they are reluctant to accept.
  2. In view of the above, is it a possibility that we open a separate account specifically for PF and transfer all the PF contribution to that account and release one cheque to bank?
  3. In case we do that, will it not amount to mixing of LC and FC funds.

Please send your feedback on the same.

Thanks and regards,

______________________

B V Soma Sastry

Centre for World Solidarity

12-13-438, Street No. 1, Tarnaka

Secunderabad 500 017

Andhra Pradesh

www.cwsy.org

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4 Responses to Query- Payment of PF

  1. Sudhakar C says:
    July 12, 2012 at 9:10 am

    Dear Friends,

    Greetings from Madurai

    It is advised to remit from LC and FC.

    It is also suggested that You can have one separate bank account to remit PF . From FC you transfer the exact amount of PF to LC (The amount transferred to LC should tally in FC books exact amount of expentiure booked in that month). along with LC amount you can remit to PF.

    There is no mix of funds we are only reimbursing the LC amount from FC to the extent of PF amount.

    Regards
    Sudhakar

  2. Rajesh Saini says:
    July 12, 2012 at 9:08 am

    Good Evening Sir

    Your Point No. 2 is better; I like

    Thanks

    Rajesh Malakar
    Account Officer
    GVNML Jaipur Office

  3. Valan Caritas says:
    July 12, 2012 at 8:54 am

    Dear Friends,

    Greetings!

    As per FC & IC you have to open two separate bank account .If you wanted to open one more account for P.F ,You can open it .The P.F account is only for maintain for P.F transaction purpose.In the P.F account FC and IC money can deposit and keep separate books of accounts.

    Regards,

    Valan

  4. Sriraman says:
    July 11, 2012 at 4:40 pm

    Dear Soma

    This is certainly a practical challenge. I am luckily with a Liaison Office now and hence have no FCRA issues 🙂 However, in my previous jobs, I have faced similar challenges, while making salary payments to staff, who were working on time sharing basis from projects with part funding from Local and FC funds. For the staff, obviously, they would expect a single pay cheque and their statutory payments, such as, PF, TDS etc also have to be paid out of one bank account.

    While Local funds cannot be transferred to FCRA account, flow of funds from FCRA account to Local is always possible and is allowed (this is my limited understanding). I, therefore, used to make such payments from Local bank account, and to the extent the cost has to be booked to FCRA projects, transfer funds from FCRA bank account to Local bank account.

    Similar arrangement could possibly work to deal with your PF payment also. I would be keen to know if there are practical difficulties is doing so.

    Best regards

    Sriraman

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