Some of the blogs and posts that i have read are really not telling the whole story and one needs to read a few just to get the final jist of the SC ruling.
Let us understand in just a short sentence what this ruling says..
FOR salaries less than 15000 Rs a month , the pf calculation will be done on basic plus special allowance.
The SC basically found that the special allowance category was a view of the employers to reduce the pf amounts paid to the employee.
I actually do not agree to this point from the court. The cost to the company that the companies includes their pf component. So its not as if the employee was being short changed in their pay packages.
The only difference is that the investment towards retirement is less... but then the money in hand for these employees will be lesser ( though there maybe a positive tax impact under section 80c).
Right now as i wrote it doesnt impact anyone who earns greater than 15k/ month.
Not getting carried away by some of the big headlines... and understanding the total impact first.. thats simplefinancialsense
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