Employees Provident Fund (‘EPF’) is a scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as ‘the Act’), which extends to whole of India. It is regulated under the purview of Employees’ Provident Fund Organization (EPFO), which is under the administrative control of Ministry of Labour and Employment, Government of India.
The Applicability for employers and employees and relevant compliances required under the provisions of the Act has been mentioned hereunder:
EPF registration is mandatory for:
The employer must obtain the registration within 1 month of attaining the strength, failing which penal provisions as mentioned under the Act will be applicable. A registered establishment continues to be under the purview of the Act even if the employee strength falls below the required minimum.
Central Government may apply the provisions of EPF law to any establishment employing less than 20 employees after giving not less than two months’ notice for compulsory registration.
Where the employer and majority of employees have agreed that the provisions of this Act should be made applicable to the establishment, they may themselves apply to the Central PF Commissioner. The Central PF Commissioner may apply the provisions of this Act to that establishment after passing the notification in the Official Gazette from the date of such agreement or from any subsequent date specified in the agreement.
Some establishments having less than 20 employees may voluntarily obtain PF registration. All the employees will be eligible for a PF from the commencement of their employment and the responsibility of deduction & payment of PF lies with the employer.
For newly incorporated companies, EPFO registration number will be issued on Ministry of Company affairs portal at the time of incorporation itself. Such companies will have to comply with the provisions of Act only when they cross threshold limit of employment.
Employees drawing less than Rs. 15000/- per month will be required to mandatorily get themselves registered with EPF. However, an employee who is drawing ‘pay’ above the prescribed limit (currently Rs 15,000) can become a member with the permission of Assistant PF Commissioner, if the employer agree.
The Employer and Employee’s contribution should be 12% of basic salary. However, the rate of employee’s contribution will be 10% instead of 12%, in case employee strength is less than 20.
Considering the current pandemic situation, the contribution to EPF is reduced to 10% from 12% for non-government organisations. Further for establishments with up to 100 employees and where 90% of those employees draw a salary of less than Rs 15,000 per month, government had announced that they will pay employer and employees contribution for another three months from June to August 2020.
Of the total employer’s contribution, 8.33% will be diverted to Employees’ Pension Scheme while the balance is retained in EPF scheme. On retirement, the employee will get his full share plus the balance of Employer’s share retained to his credit in EPF account.
According to the provisions of the Act, EPF withdrawal is permissible only if employee retire from service after attaining 55 years of age. However, the employee may withdraw the amount prior to retirement upto the prescribed limited only for the specified reasons stated therein. The total EPF balance on withdrawal includes the employee’s contribution and that of the employer, along with the accrued interest.
The interest accrued every year is tax exempt. Further, the EPF withdrawal is also not taxable if one has completed at least five years of continuous service. In case the amount is withdrawn without completing 5 years of continuous services, the total employer’s contribution amount along with the interest earned will get taxable in the year of withdrawal. Also, the amount of deduction claimed under Section 80C on one’s own contribution will be added to one’s income in the year of withdrawal. In addition, the interest earned on one’s own contribution will also be subject to tax.
Employer and Employee’s PF dues
15th of the following month
Payment of Pension Fund
15th of the following month
Payment of Insurance Fund
15th of the following month
Detail of employees
Detail of employees enrolled as members PF fund, within 1 month of coverage in the prescribed form
Nomination Form
Immediately on Joining the fund in the prescribed form
Addition of members
Detail of newly enrolled members within 15 Days of the following month in the prescribed form
Deletion of a member
Detail of members left service during the month before 21st of the following month in the prescribed form
Details of contribution
Detail of employees and employer’s contribution by 25th of the following month in the prescribed form
Detail of wages and contribution
For each member details shall be given By 30th April every year
Yearly Consolidated statement of contribution
To be forwarded yearly along with Form 3A
Return of ownership of the establishment
Within 15 days on coverage and whenever there is a change in ownership
It is also known as the PF Advance Form. It can be used for obtaining withdrawals, loans, and advances from the EPF account.
This form is used for availing a monthly pension.
This form is used to claim benefits under the EPF scheme. Form 10C is used to withdraw the funds that the employer contributes towards EPS.
This form is used to transfer your PF amount from the previous job to your current one. This helps in keeping all the PF money under one account.
This form is used to claim the final settlement of EPF account.
Family members can use this form to withdraw the PF amount in case the account holder passes away.
This form can be used by a nominee in order to claim the benefits of the Employees’ Deposit Linked Insurance.