Trending @Accenture; Can you explain what will happen to fix PF component in salary?

Fixed option in PF means your PF will calcukate on 180000 BP (PF = BP * 12%). So you will end up investing 21600+21600(employee+ employer)annually. If you select option Y then your PF will calculate on your declared BP (for e.g if you have decided your BP as 10,00,000 annually then your PF will be BP *12% = 1,20,000) so you will end up investing 1,20,000 + 1,20,000 (employee+ employer).

BP = Basic Pay

So let’s say your CTC is 15,00,000 so in option A (Fixed) you will be paid (15,00,000 - 21600 -21600 - TDS) in salary

And in option B (Y) you will be paid (15,00,000 - 1,20,000 - 1,20,000 - TDS) in salaries

since your taxable salary is CTC - Employer Contribution.

So in case of option A you will be paid more salary but tax will also be more since employer contribution is less

But in option B you will get less salary but your investment will be good and since your taxable salary is less so less incomeTAX

I personally prefer Option Y Since returns are good in PF and I am not much into Mutual Funds, shares and SIP.

But if you are someone who want his money in salary and invest on multiple portfolios then go for option Fixed.