Yes, Subsistence allowance will attract contribution under the Provident Fund Act. Suspension of an employee does not end the employer-employee relationship with his employer. The Supreme Court has held that subsistence allowance forms the ‘wages’ of a suspended employee under the Employees State Insurance Act, and hence employer / employee contributions to the ESI fund must be made on the subsistence allowance. (ESIC v. Popular Automobiles, Civil Appeal No. 3850 of 1993, decided on 29.09.1997).
An analogy may be drawn between the ESI & Provident Fund Act contributions in the case of a suspended employee, since both legislations are beneficial in nature, and the purpose of both is to safeguard employees. The Supreme Court has also compared Section 7A of the Provident Fund Act in India and Section 45A of ESI Act in Bharat Heavy Electricals Ltd v. Employee’s State Insurance Corporation (Civil Appeal No. 1271 of 2008, as decided on 14.02.2008) which gives power to inspectors under the respective statutes to initiate proceedings against employers for failure to pay contributions under the respective statutes. The Supreme Court held that the intent and purport between the two Acts cannot be dissimilar. Also, the Employee Provident Fund Scheme framed under the Employee Provident Fund Act, provides in Para 26A that a member of the Fund continues to remain a member until he withdraws the money in his name from the Fund, or until he is excluded form the Scheme under a scheme for exemption.
Thus, in light of the above, though it does not appear to have been expressly held as such by a court, it can be stated that subsistence allowance ought to constitute wages under the Employee Provident Fund Act, and Provident Fund contributions ought to be made on subsistence allowance, since the suspended employee continues to remain a member of the Provident Fund, and the employer-employee relationship is not extinguished on suspension.