THE EMPLOYEE'S

PROVIDENT
FUND & MISCELLANEOUS
PROVISIONS ACT 1952
Objective
A PF Act is created with a purpose of providing
financial security and stability to elderly people.
It's purpose is to help employees save a fraction
of their salary every month, to be used in an
event that the employee is temporarily or no
longer fit to work or at retirement.
 EPFO is one of the largest society security
organization in the world in terms of members
and volume of financial transactions undertaken.
EPFO is a statutory body of the Indian govt.
under labor & employment ministry.
The,Constitution of India under
"Directive Principles of State
Provides that:

The state shall within the limits of its

economic capacity make effective provision
for securing the right to work, to education,
and to public assistance in cases of
unemployment, oldage, sickness &
disablement and undeserved want.
 INDEX
THE EMPLOYEE'S PROVIDENT FUND Acr 1952
OD O
ELIGIBILITY
ELIGIBILITY AND ENTITLEMENT
CALCULATION
BENEFITS
INTEREST
NOMINATION
ANNUAL STATEMENT OF ACCOUNTS
FULL SETTLEMENTS
• ADVANCES/ WITHDRAWALS
 EMPLOYER'S ROLE AND RESPONSIBILITY

ANNUAL RETURNS iii.

PENALITY
EXEMPTION
EMPLOYEE'S ROLE AND RESPONSIBILITY
EMPLOYEES PENSION SCHEME* 1995
O
PENSION BENEFITS
ELIGIBILITY
CONTRIBUTION IN .EPF & EPS
APPLICATION & FACTS

THE EMPLOYEES DEPOSIT-LINKED INSURANCE SCHEME, 1976 (EDLJ)

CALCULATION
ELIGIBLE
EXEMIYHON

LIST OF FORMS

FORMS & CHALLAN DESCRIPTION

oEmployees
provident
fund, 1952
 provident funds act 1952

As per the new 2012

The employee's a INTRODUCTION: rules issued recently, the
EPFO has made
amendments to the way
Salary consist of two parts i.e. earnings in
and deductions which employee and
employer contribution
would be calculated
It is one of the statutory deduction done hereon. Foremployees;
this amendment is particu
by the employer at the time of payment larly important as it
of salary impacts his/ her take
home salary

and income tax liability as

This act has come into force to give better well,
 providont funds act 1952

A quick look at the amendmentst Change in Salary definition:•

Previously the term 'Salary' for computing EPF
dependents m case of his death during This act is

future to employees on their retirement or to his contribution

included basic
DA. AS per new
employment applicable to all
state except
It is the compulsory contributory fund for the J&K..
future of an employee after retirement or for his rules, 'SALARYr will

dependents In case of early death

 providont funds act 1952

include Basic DA allowance that are Ordinarily, necessarily and uniformly paid
to employees.
u ELIGIBILITY:
every industry employing 20 or more persons (180 industries are specified
in schedule 1 of the act)
every industry employing 20 or more persons which the Central govt. may
notify

any other establishment notify by the central govt. even if employed person
are less than 20
a ELIGIBILITY AND ENTITLEMENT:
 providont funds act 1952

• Every employee employed directly/ through a contractor who is in receipt of

wages are eligible of become the member of this fund (exception* apprentice under
the apprentice act and casual worker)

• Irrespective of permanent/ probationaryæmployees, every other employee

is eligible for joining the PF scheme from the date of joining Of service

• minimum 10% Of basic pay for establishment employed less than 20 persons;
sick industries declared by necessary authority; beedi, jute, brick, coir; guar gum
factories/ industries

• other industries maximum 12% of basic pay

 providont funds act 1952

• a member can contribute voluntarily more than the statutorily prescribed

rate (up to 100% of basic pay) which is transferred to his PF A/c
CALCULATION:

• 12% contribution by employee directly transferred to his PF A/c

• 12% contribution by the employer out Of which 8.33% is transferred to

employee pension scheme and REST i.e. 3.67% is transferred to PF A/c

• 1.10% administration charges on total wages payable by the employer

• 0.50% EDI-I is calculated on total EDLI slab (Rs. 6500) wages and payable by
employer towards EDI-I fund
 providont funds act 1952

• 0.01 % EDI-I administration charges on total EDLI is payable by employer

Table below gives the rates of contribution of
EPF,
EPS, EDLI, Admin charges in India.
Scheme Name Employee Employer
contribution contribution
Employee provident fund 12% 3.67%

Employees' Pension scheme 8.33%

Employees Deposit linked
0.5%
insurance
 EPF Administrative charges 1.1%

EDLIS Administrative charges 0.01%

Calculation pf Employees Provident Contributions
Basic salary of Rs 3500 i.e. less than Rs 6500
Contribution Towards Calculation Amount
EPF Employees share 3500 x 12% 420
Employer share EPS 3500 x 8.33% 292
EPF employer share 3500 x 3.67% 128
7500 x 1.1%

7500 x 0.01% 0.75 ( Round up to Rs 1/-)

EDLj charges 3500 x 0.5% 18
EPF Admin charges 39
EDLI Admin charges
Calculation of Employees Provident Fund
Contributions

Basic salary Rs. 7500 i.e. above Rs 6500 Method-I

Contribution Towards Calculation Amount

7500 x 1.1%

7500 x 0.01% 0.75 ( Round up to Rs 1/-)

EPF Employees 7500 x 12% 900
share 6500 x 8.33%
EPS Employer share 541 7500 x
541 359
7500 x 0.5% 38
EPF Admin charges83

7500 x 1.1%

7500 x 0.01% 0.75 ( Round up to Rs 1/-)

 Provident
Calculation of Employees Fund Contributions
Peposited Amount

Basic salary Rs. 7500 i.e. above Rs 6500 Method-2

Contribution Towards Calculation Amount
EDLI Admin charges

7500 x 1.1%

7500 x 0.01% 0.75 ( Round up to Rs 1/-)

 providont funds act 1952

EPF Employees 7500 x 12% goo 6500 x

share 8.33% 541
EPS Employer share
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 72 Calculation of Employees Fund
Contributions
peoosited Amount : 8s. < Rs. V*5.€5<

Basic salary Rs. 7500 i.e. above Rs 6500 Method-3

 Provident
Contribution Towards Calculation Amount

EPF Employees 6500 x 12% 780 6500 x

share
8.33% 541
EPS Employer share
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5% 33
EPF Admin charges 72

7500 x 1.1%

7500 x 0.01% 0.75 ( Round up to Rs 1/-)

 providont funds act 1952
EDLI Admin charges

a BENEFITS:
• employees can take advances/ withdrawal the PF in case of
retirement, medical care, housing, for the education of children, etc...

• up to 90% of amount can be withdrawn at the age of 54 years or

before one year of actual retirement. (Form 19)

• PF amount of deceased person iS payable to his nominees/legal heirs

• equal contribution by the employer present interest rate 8.6%

• PF a/c can be transferred if employee changed from one establishment to.

other where PF facility is available
 Provident

7500 x 1.1%

7500 x 0.01% 0.75 ( Round up to Rs 1/-)

 provident funds act 1952
The employee's

INTEREST:

Interest is credited to member PF a/c on monthly running balance

Interest rate is fixed by the central govt. in consultation with the

central board of trustees of EEPF every year of march/ April

Interest rate is fixed i.e.8.6%

(I) Sub-Paia (6) was added m Para (60). As per this interest shall not be credited to the account t of the
employee from the date On which it has become inoperative. An account becomes inoperative under
Para.72(C), if no claim has been made within three years from the dateåt becomes payable.

"Para of Scheme 1952.

 provident funcls act 1952
The existingsub-Para (6) permits transfer ofcertain sums incapable of being poid to the
employee/iegal heirs either for want of address or for want of receivinva claim for the same, an
inoperative account if no clairn has been preferred within 3 years of from the date on which the
amount becomes payable.
After the amendment, the period of thirty six months (but three years) needs to be computed
from the date of preferring an application for withdrawal under Para g (69) Or (70).

NOMINATION:

• The member can nominate to any

person/ persons to receive amount in case of
his death (Form 2, revised)
 providont funds act 1952
• The details provided by the
member is maintained at the regional
provident fund office which is used at time
of death of the member

ANNUAL STATEMENT OF ACCOUNTS:

 provident funcls act 1952
• After the close of each year of contribution, annual
account sent to each member through establishment where
the member was last employed through form 23

• Form 23 shows the opening balance at the beginning

of the year, amount contributed, interest credited at the end
of the period and the closing balance at the end

• If any error is noticed in the form 23, the member

shall bring the same to the noticed of PF officer through
the employer within 6 months from the date of receipt of
statement
 providont funds act 1952

• FULL SETH„EMEVIS

• PF a/c settled immediately under the circumstances

• retirement after 58 years

• retirement on account of permanent incapacity

• termination of service on retrenchment

• voluntary retirement.scheme
 provident funcls act 1952
• permanent migration from India to settle abroad/taking
employment
- for female employee leaving service for getting married

• PF a/c settled after two months under the circumstances: from

resignation of service
 providont funds act
1952

ete„ i 000/-1
u EMPLOYER'S ROLE AND RESPONSIBILITY:
MONTHLY RETURNS:

• Filing monthly PF returns with EPFO with in 15 daysof close of each

month

• Provide a list Of new employees joined in the establishment during the

preceding month and are qualified to become the member of the fund (Form5)

-Provide the list of employees leaving service during the preceding month
(Form-10)
-Employer should file the '"nil"' return of there is no new employee or no
employee leaving the service during the preceding month

-Provide the total no of member last month, joined member and resigned
member during the preceding month, and total no. Of present subscriber to the
fund (Form-12A)
ANNUAL RETURNS:

-Employer shall send to commissioner within one month of close of the year, a
consolidated annual contribution statement (Form-6A) and individual
employee sheet (Form-3A) showing the contribution made by the employee
and the employer during the year

PENALITN:
 -17-37% interest is payable for the delayed period in remitting
contribution/ administration charges depending upon the delayed period
EXEMIYVIONW.

-Employer can get the exemption from the scheme if the similar/better
benefits are provided other than the scheme by forming a VPF trust which
will work under the rule and regulation of EPFO
a EMPLOYEE'S ROLE AND RESPONSIBILITY:
• Provide details for self and nominees (Form-2) for PF & pension scheme at the
time of joining of establishment

• In case of already have a PF a/c apply for transfer of previous a/c to present a/c
• If willing to contribute more, inform to employer to deduct the same
from salary (VRS)

• VPFcan be 100% of salary

• Understand that employer is not liable to contribute to VPF
• understand EPFO don't have any agent/Middleman

Employees
Pension
Scheme, 1995
 pension scheme, 1995

INTRODUCTION:

Family Pension Scheme. 1971: (on or before the

15.11.1995) If member is alive, no pension
If member is not alive, pension to spouse only
Pension amount was also very small as the contribution collected
to the scheme is only 334% (1.67%x2) of the wages
This scheme ceased when the EPS-95 came into existence.

Employees Pension Scheme. 1995 (after the 15.11.1995)

If member is alive, pension to member
 pension scheme, 1995
If member is not alive, pension to spouse and 2Children below 25
years Of age
This scheme is applicable to all members who joined EPF after
15.11.1995
ÉhhpEyee•s

EPS, 1995 offers pension on disablement. widow

pension. and pension for nominees.
It is financed by diverting 833% of employer's monthly -contribution
from the EPF (restricted to 8.33% Of 6500 or IRS. 541) and govt.
contribution Of
1.17% of the worker's monthly wages.
 pension scheme, 1995
The purpose of the scheme is to provide for:
Superannuation Pension: member who has rendered eligible service of 20
yrs. And retires on attaining the age of 58 yrs.
Retiring Pension: member who has rendered eligibleservice of 20 yrs. and
retires or otherwise ceases to be in employment before attaining the ageof 58
yrs.
3) Permanent Total Disablement Pension
4) Short Service Pension: member has to render eligible service of 10yrs. And more but
less than 20 yrs.
ÉmpEyee's
 pension scheme, 1995
Pension Benefits
Lifelong pension is available to the member and upon his death
members of the family are entitled for the pension.

+ The monthly retiring pension is decided on the basis of

'pensionable Service' and 'pension Salary' and is worked out as
follows:

Monthly Pension = (pensionable Salary x pensionable Service)/ 70

Pensionable Salary is the average contributing Salary immediately

Preceding 12 months from the date of exit from the scheme, normally
 pension scheme, 1995
this would be limited to IRS. 6500/ Pensionable Service can not
exceed 35 yrs.
ÉmpEyeo•s

ELIGIBILITY

Minimum 1 Oyrs Of Pension on Service less than Oyrs

service and pension discounted rate at Eligible to pensionary
payable at the age of theage Of 50yrs. benefits OR claim
 pension scheme, 1995
returns of
S gyrs ontribution/withdrawal
benefits
pension scheme, 1995
 pension scheme, 1995
ÉffypEyee's
 pension scheme, 1995
Employee's
APPLICATION:
It is compulsory for all the member who has become the member of
EPF scheme

Facts:
A employee can start receiving the pension under EPS only after
rendering a minimum service of 10 yrs. And attaining the age of 58/
50 yrs.
After 50 yrs. And before 58 yrs. Early pension is payable subject to
discounting factor @ 3% for every year falling short of 58 years.
 pension scheme, 1995
In case of death/disablement, the above restrictions doesn$t
apply.

Of Pension scheme 1995

As per Para (1) & (2) of Para (20) the employer has to submit a consolidated return of the employees
entitled to become members and a return of employees leaving service in physical form to the
commissioner.
Now* Para (5) hasheen added after Para (4) whereby Such returns shall be submitted in electronic form in the
format prescribed by the Commissioner.
THE EMPLOYEES DEPOSIT-
 LINKED INSURANCE SCHEME,
1976
THE-EMPLOYEES DEPOSIT-LINKED INSURANCE
SCHEME, 1976
APPLICATION:

It is compulsory for all the members who are the memberof PF scheme

Life insurance benefits (death coverage) Of the employees is available under thiS scheme while in
service

CALCUL.AT!ON:

It is calculated on EDI-I slab-KS, 6500

 1.10% administration chargeSon total wages payåble by the employer tOwards EPF go
minimum 5/-
0.50% EDLI is calculated total EDLI slab (RK. 6500) wages and payable by employer EDLI
fund
001 % EDLI administration chargeson total EDLI is payable by employer subiectto
minimum
22 of EDLE person entitled to receive I'.F accumulations of a deceased member of a fund or Provident
evempt under Sec.17 of the P.F Act. is also entitled to receive an amount which is equal to the average of the
balances in the P.F account Of the member during the preceding 12 months ordurigg the period of rmembcrship of
the deceased employee whichever is If such average balance IW3S0iÅV,. he entiiled to 25% of the amount in excess
of RS- 35000/ - subjecE to the maximum Rs fter,amendment ogilio : aw after the amendment, the ceilin limits of the
average balance of Rs.3StX)Oj. has up to Rs an incase the avera balance exceeds the person is entitled to receive an
additional 40% of the amount in excess of Rs %OO/• instead of the previous 25% subject to the maximum of (Rs.
one lakh)

THE-EMPLOYEES DEPOSIT-LINKED INSURANCE SCHEME,

ELIGIBLE:

Person who is eligible to receive PF dues of deceased member who

died while in service is only eligible to receive EDLI fund

EXEMPTION:
Employer can seek exemption from the scheme if similar/ better
benefits. are provided other than the scheme with the consent of
majority of employee
LIST OF FORMS
List of forms
 For Organization:-
Performa Registration form io register the
Organuation under act .
Form—SA, for details or Directors / Proprietors of
the Organization. Form— 9, for all covered Employee
Details at the time or Registration.

For New Entrance:-

Form— 2, Nomination Form with detajs of Employees, Nomotee & PFA/e No.
e Form— 11, Declaration Form to lind the New kinees is eligible ror EPFmembersor Noi
through hi.s/lw•r 'K•claration about last emp yment.

For Monthly
Combined (mallan triplicate Copy aner clearing of Cheque.
Form— 5 for all new Joinees Details
Form — 10 for all len or retired employees.
Form — 12.A With summaries details or above

Return >
Form Monthly contribution details Of employee & employer .
Of Of all employees covered employees.
Reconcjiation Statement or PE cont. due & Deposited to the Bank towards the
EFF.
Of Covered as COPY in CD (DBF version)
Various Forms for Provident Fund Scheme:
FORMS & CHALLAN DESCRIPTION