Provident Fund For all employees who work in an organized sector, following is the PF contribution every month.

PF contribution by Employee = 12% of basic salary. PF contribution by Employer = 12% of basic salary. Employer Pension Scheme Out of 12% contribution from employer, 8.33% of the contribution (subject to maximum of 541 rs/month) is invested in employer pension scheme. Lets take an example and understand this. Ram's basic salary per month = 15,000 Ram's contribution to PF = 12% of 15,000 = 1,800 Ram's Employer contribution = 12% of 15,000 = 1,800 Employer's contribution to EPS = 8.33% of 15,000 = 1250 This 1250 is higher than the max limit of Rs 541/month and hence Employer's contribution to EPS = 541 Employer contribution to PF = 1800-541 = 1259 So Total PF contribution to Ram's PF account per month = 1800 + 1259 = 3059 How to calculate your PF balance? Interest Rate on PF account = 8.5% (fixed by central govt) So monthly contribution of 3059 for one year @ 8.5% Hope its clear now

Let me put it in easy steps. Employee total contribution is 12% of Basic The Employer contribution is divided in two EPS 8.33% / EPF 3.67% parts. If Basic is less than >6500, the actuals are taken for EPS and EPF at stipulated rate.

For Basic <6500, EPS ceiling is fixed at 541 and the remaining goes to EPF. Blindly the calculation cannot be done. Just apply the banking compound interest to the (EePF + ErPF) accumulation and don't mix Pension Fund Scheme in to this. Hope I have clarified the exact doubt of yours.

First thing is that, Interest on PF is not 9.5 %. It is 8.5%. now lets come to your query, first you understand that, employees contribution (means 12%) directly goes in Provident fund a/c. but, Employer's contribution (13.61%) is divided in to 5 part as mentioned below.. 1) 8.33% goes in Pension Fund 2) 3.67% goes in Provident Fund 3) 0.50 % goes in EDLI (Employees Deposit Link Insurance) rest 1.61 % divided in Admin Charges 1) 1.10% Admin charges on PF A/c 2) 0.01% Admin charges on EDLI a/c If you see you annual PF slip carefully, So, you will found that, Provident Fund amount details only mentioned in annual slip, it means not mentioned the Pension amount details. Interest rate of PF is calculate on employees contribution as well as Employer Contribution. So, you are getting the interest on both contribution. That the reason, it is wonderfull to you, its showing more than you expection. for your information, your some more money (Other than mentioned in annual PF slip) is safe in Pension Fund. In further you can withdra you PF as well as Pension amount also. but EDLI amount is not be reimbursment, It can be use only, IF you not register in ESIC, & if you meet any accident in further (Sorry to say that), you will be get the benefit of same. EDLI is like a Insurance. If you want to know any thing else, Please let me know...

Provident Fund scheme is a retirement benefit scheme, where the benefits are paid in lump-sum after retirement. It is made mandatory for all organizations employing more than 20 employees. Under this scheme, a stipulated amount (12%) is deducted from the employee's salary and contributed towards the fund. The accumulated amount with interest is returned to Employee on the retirement.

Employees Provident Fund scheme is introduced in 1952 to provide the employees some financial benefits post retirement and old age. This scheme supports the employees financially post service by keeping a portion (contribution) from the employees monthly salary (From the date of joining in an establishment to till the date of retirement). The contributions from employer and employee will get accumulated and paid after the retirement as pension or otherwise.

However there are some rules, regulations, rates of contribution & exceptions present in this scheme which are explained in the next sections.

As per Para 26(2) of the Employees Provident Fund Scheme, 1952, every employee employed in or in connection with the work of a factory or establishment other than an excluded employee shall entitled and required to become a member of the Fund from the date of joining the factory or establishment

Applicability Employee means

1. 2.

Employed by or through the contractor in or in connection with the work of the establishment. Engaged as an apprentice, not being an apprentice under the Apprentices Act, 1961.

Excluded Employee

1. 2. 3.

An employee of the company to whom both the following two conditions apply at the time of joining the services of the company. His/Her Pay is more than Rs. 6500/- per month. Does not have any current PF/EPS Balance under EPF & MP Act, 1952.

Voluntary Coverage With the consent of majority of the employees, the establishment may opt for voluntary coverage.

Contribution Minimum contribution towards PF should be 12% of the Pay. 'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value of food concessions admissible thereon. Minimum PF Contribution - 12% of the Pay Maximum PF Contribution - 100% of the Pay

Basic Wages - "Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in

either case in accordance with the terms of the contract of employment and which are paid or payable in cash, but dose not include,

1. 2.

The cash value of any food concession; Any dearness allowance, house rent allowance, overtime allowance, bonus, commission or any other allowance payable to the employee in respect of employment or of work done in such employment.

3.

Any present made by the employer.

Voluntary Contribution - Member shall be at liberty to make voluntary contribution.

Employers Contribution - Equal to 12% of the Pay of employee.

Pension Fund (EPS) - 8.33% of Pensionable Salary Pensionable Salary = Rs. 6500/- or Pay (whichever is less).

Provident Fund -12% of the Pay minus EPS.

In the 12% contribution from Employer, 8.33% contribution is kept in Pension fund and the rest is kept in Provident fund, where as employees 12% contribution is for only provident fund.

In addition to the contribution amount, employer has to pay the admin charges for PF Office. Amounts payable to Regional PF Commissioners office are as follows:

1. 2. 3. 4.

A/c No. 1 - 12% of the Pay, Employees Provident Fund Contribution. A/c No. 1 - Voluntary Provident Fund Contribution. A/c No. 1 - 12% of the Pay minus EPS, Employer Provident Fund. A/c No. 10 - 8.33% of the Pensionable Salary (EPS).

Admin Charges and others:

1. 2. 3.

A/c No. 2 - 10% of the Pay, PF Admin. Charges-Minimum Rs. 5/-pm. A/c No. 21 - 0.50% of Pensionable Salary for EDLI contribution. A/c No. 22 - 0.01% of Pensionable Salary for EDLI Admin. Charges Minimum Rs. 2/-pm.

Interest on PF Accumulation - The interest on accumulated amount is credited to the members account on monthly running balance with effect from the last day in each year. The Rate of interest is fixed by Central Government in consultation with the Board of trustees, Employees' Provident Fund. As of now, with effect from the date 01/04/2005 the current rate of interest is 8.50%. The interest on PF

accumulations are exempted from income tax.

Withdrawal from the fund Withdrawals are usually made at the time of retirement or otherwise. Member is entitled to withdraw full amount in the following cases:

1. 2. 3. 4. 5. 6.

On retirement from service. On retirement on account of permanent and total incapacity for work due to bodily or mental infirmity. Immediately before migration from India for permanent settlement abroad or for taking employment abroad. On termination of service in the case of mass or individual retrenchment. On termination of service under a voluntary scheme of retirement. After two months of resignation. In case of no employment.

Note: A member of the Fund shall continue to be a member until he withdraws under aforesaid conditions.

Types of advance from PF Accumulation Employees are allowed to get a loan (partial amount) on PF accumulations in certain cases. Types of advances can be obtained are as follows:

1. 2. 3. 4. 5. 6. 7. 8. 9.

Purchase dwelling site. Construction of a dwelling house. Completing construction of the house. Buy a dwelling house /Flat from Agency. Purchasing a newly constructed/old dwelling house or flat from an individual. Purchasing house/flat from a promoter. Additional Loan -alterations/improvements. Further housing withdrawal. Repayment housing loan.

10. Withdrawal on 54 Years or within 1 year before actual retirement. 11. Closure or lockout/non-receipt of wages for a continuous period of 2 months etc., 12. Further advance in case of closure or lock-out of establishment/ factory for more than 6 months. 13. Advance for illness of member and his family. 14. For marriage, or post matriculation education. 15. Property damaged by a nature calamity. 16. If Members affected by cut in the supply of electricity. 17. Member physically handicapped.

Nomination - The member of Provident Fund should nominate a person, conferring right to receive the amount that may stand to the credit in the fund, in his/her absence (Death). The member may furnish the particulars concerning himself and his family.

1.

An employee may be allowed to make a nomination conferring on one or more persons the right to receive the provident fund amount.

2.

If an employee nominates more than one person, he shall, in his nomination specify the amount or share payable to each of the nominees.

3.

Where an employee has a family at the time of making a nomination, the nomination shall be in favor of one or more persons belonging to his family.

4. 5. 6. 7.

Any nomination made by an employee in favor of a person not belonging to his family shall be invalid. If at the time of making a nomination the employee has no family, the nomination may be in favor of any person or persons. A nomination made by an employee may, at any time, be modified by filing Form no. 2 Where the nomination is wholly or partly in favor of a minor, the Member may, appoint a major person of his Family to be the guardian of the minor nominee Provided that where there is no major person in the Family, the Member may, at his discretion, appoint any other person to be a guardian of the minor nominee

Family for Provident Fund (PF) includes, in case of a male member, his wife, his children (whether married or unmarried), his dependent parents and his deceased sons widow and children.

Family includes, in case of a female member, her husband, her children (whether married or unmarried), her dependent parents, her husbands, dependent parents, her deceased sons widow and children.

Family for Pension Fund (EPS) Wife in case of male member of the Employees Pension Fund; Husband in the case of a female member of the Employees Pension fund; and sons and daughters includes child legally adopted by the member below 25 years of age.

Employee Provident Fund Scheme - Employees' Provident Fund Scheme takes care of following needs of the members:

(i) Retirement (ii) Medical Care (iii) Housing (iv) Family obligations (v) Education of Children (vi) Financing of Insurance Polices

How the Employees' Provident Fund Scheme works As per the act, both the employer and employee have to contribute the fund at a rate of 12% of Basic wages, DA and other allowances. However in the following cases, contribution rate varies with the general rules. The rate of contribution is 10% in the case of following establishments.

1. 2.

Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97. Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction,

3. 4.

Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/Factories. The contribution under the Employees' Provident Fund Scheme by the employee and employer will be as under with effect from 22.9.1997.

Withdrawal before retirement After attaining the age of 54 years, a member can withdraw up to 90% of the amount of provident fund at credit Claim application in form 19 has to be submitted to the concerned Provident Fund Office.

Accumulations of a deceased member In case of a members death, the amount of PF at the credit of deceased member has to be paid to the nominees / legal heirs. Claim application in form 20 has to be submitted to the concerned Provident Fund Office.

Transfer of Provident Fund account The amount in the PF account can be transferred from one place to other in case the member changes his/her job. Transfer Application in form 13 has to be submitted to the concerned Provident Fund Office for transferring the amount.

Annual Statement of account At the end of every financial year, the annual statements of account are sent to the members through the organization where the employee was last employed. The statement of accounts in the fund contains the opening balance at the beginning of the period, amount contribution during the year, total amount of interest credited at the end of period, withdrawals during the period and the closing balance at the end of the period. The errors (If any) in statement of account has to be brought to the notice of concerned officers through employers with in 6 months of the receipt of the statement.

SOCIAL SECURITY NUMBER (SSN)

Employees Provident Fund Organization has launched a major project called Re-Inventing EPF India to provide world class service to

all its clients. As part of this project a unique identity number called Social Security Number (SSN) is allotted to every Provident Fund subscriber. It is the first step towards providing world class service to all Provident Fund subscribers. Social Security Number is a unique 14 digit identification number. Subscribers information is collected in prescribed SSN forms along with Photograph of the member. The SSN forms are supplied by Provident Fund Office, free of cost.

Social Security Number is compulsory for every Provident Fund subscribers in the new system for providing all kind of services. Provident Fund Office will be setting up camp in your establishment or nearby area for data collection for allotment of Social Security Number very shortly. Please contact your employer or the Provident Fund Office for filling up of the forms for getting Social Security Number.

AFTER ALLOTMENT OF SOCIAL SECURITY NUMBER

1. 2.

You will have one unique number for life time including for your Pension after retirement. You will get ANY WHERE ANY TIME FACILITY, when all the offices of Employees Provident Fund Organization are eventually linked together electronically in a phased manner.

1.

There will not be any necessity to transfer your Provident fund accumulations every time you change your employment, or move from one place to another.

2. 3.

Your Provident Fund account will be updated every month instead of the present yearly updating. Eventually, when the necessary infrastructure is put in place, you can know your Provident Fund balance even over telephone (IVRS), through the internet or through specially set up interactive kiosks.

Note: Please make sure to furnish complete information about you in the SSN Form. Social Security Number is compulsory for all PF members.

PROCEDURE FOR ALLOTMENT OF SSN

1.

A unique SSN form supplied free of cost by EPFO field Office will have to be got filled by every employer in respect of each of his employees.

2.

For allotment of SSN the data will be captured either through a Camp (in case where a large number of employees are available in an establishment under one roof), in the premises of the establishment itself; or filled in forms with pasted photo. The procedure to be followed is as under-

3.

The employer/manager of the establishment should get the date and venue of the Camp decided in consultation with the local EPF Officer In-charge of SSN so that attendance of all the employees of the establishment is ensured in the camp.

4.

Forms should be filled after reading and understanding the form filling instructions. If need be, seek the help of the form filling enumerators accompanying the data collection teams. The six personal information viz members name, his/her fathers name,

mothers maiden name, his date of birth, , place of birth, sex; plus one change of original name i.e. (if the member was known by any other name earlier) will be used to identify the person uniquely. 5. Employer will be aided/ assisted in filling up the forms by a team of data collection vendor accompanying local EPF official termed as ECRs (EPF Camp Representatives). 6. Data (from filled forms of each individual) and digital photo of the member will be captured in the Camp by a joint team of local EPF Office and data collection vendor. 7. 8. The details furnished in the forms will be verified and signed by the employer (for the authenticity and accuracy. Employees, who could not attend a camp, can join another adjoining next camp. Still, if some members could not visit the camps they can paste a passport size photograph (preferably colored) and submit the same at local field Office of EPFO (Sub Regional Office, Regional Office). 9. Once data has been collected, a communication regarding number allotted to each employee will be sent to the employers who will communicate the number to respective individual. 10. All new employees will fill the forms with pasted photo and submit the same to EPFO or can visit local EPF Office to get his/her details captured in the permanent Camp.

BENEFITS TO P.F SUBSCRIBERS

1. 2. 3.

The Subscriber working anywhere will be able to file his P.F. claim for withdrawal or advance in any of the 260 offices enrolled. Provident Fund claims will be settled within two or three days. Each subscriber will be allotted Unique Identity Number (Social Security Number). This will remain constant and hence change of jobs location will not involve any transfer of account.

4.

Employees Provident Fund Organization will provide electronic filing of claims of members through employers.

AFTER ALLOTMENT OF NSSN

1.

One need not get ones Provident Fund claim attested by the employers. One can directly submit it to the P.F. Office through Internet (E-mail) or in any office in the Country.

2.

One will get anywhere any time facility. This means one can get his P.F. Account settled in any of the P.F. Offices across the Country.

3. 4. 5. 6.

Ones P.F. balance will automatically be transferred in case of change of employment. Ones P.F. account will be updated every month instead of the present yearly updating. One can know his P.F. balance monthly even over telephone or on WEB / NET. One will have his unique number for lifetime including ones Pension after retirement.

BENEFITS TO THE EMPLOYERS

The Employers will be able to electronically file the monthly returns with particulars of employee-wise contribution. The number of returns to be filled in a year will be reduced to 12 form from the present 48. Registration of Establishments with the P.F. office will be online. E.P.F.O. will give every employer a unique business number, which will be integrated with the Permanent Account Number issued by the Income Tax Department.

Voluntary compliance will be the norm and enforcement action will become an exception. Compliance action will be focused on delinquency under reporting or non-reporting of employment strength.

Instructions for a member while sending application to Employees' Provident Fund

General

1.

Use appropriate forms for claiming Provident Fund Pension, withdrawal benefit / scheme certificate, Employees' Deposit Linked Insurance benefit, etc. as given below.

1. 2. 3. 4. 5. 6. 7.

Form-19 - To claim final settlement of Provident Fund by a member. Form-20 - To claim Provident Fund by nominee/legal heir on death of the member. Form-10 D - To claim pension. (In duplicate if it is within the state, in triplicate, if it is outside the state.) Form-10 C - To claim withdrawal benefit/scheme certificate under Employees' Pension Scheme '95. Form-5IF - To claim assurance benefit under Employees' Deposit Linked Insurance '76 by nominee/legal heir of a member. Form-31 - To claim temporary withdrawal/advance under Employees' Provident Fund scheme '52. Form-13 - To effect transfer of Provident Fund/Pension from one A/C to another.

2. 3.

Ensure that all columns of the application are filled completely. Information in the application form relating to name, a/c no., should agree with the details available with Employees' Provident Fund Organization; which were furnished by the employer at the time of enrolling to Provident Fund.

4. 5.

Application should be signed by the member/claimant. It should be attested by the former employer. In case attestation by the former employer is not possible, it should get attested by any other authorized official specified with application form.

6.

Application for final settlement can be sent by a member on completion of 2 months from the date of leaving service, if the reason for leaving service is other than superannuation, medical ground, retrenchment and V.R.S./ Female members getting married etc.

7.

Desired mode of payment can be given legibly, if the amount involved is more than Rs. 2000/-. The amount will sent by deposit

in payees' bank a/c. To facilitate this, Bank a/c no., name and address of the bank should be furnished. An advance stamped receipt should also accompany this application. 8. Application may be supported by the return Form-10, showing the details of leaving service and details of contribution for the year in Form-3A, if not sent earlier by the employer.

Specific additional requirements: A) Death cases:

1. 2.

Nominee/legal heir should apply in Form-20 /Form-10-D /Form-5IF. If the member has not executed any nomination, application should be supported by certificate of family members issued by employer/revenue official/sworn in an affidavit by the family/ member/legal certificate from a court of law.

3. 4.

Death certificate of the member. Certificate of the employer stating whether the death was while in service of the member or not.

B) Pension cases:

1. 2. 3. 4. 5. 6.

Joint photograph of member/spouse or the claimant should accompany the application. Option for return of capital/commutation should be specified clearly. Details of non-contributory period during the service, wages/salary for last 12 months should also accompany, if not already sent. Details of the branch of the specified bank may be given legibly. Date of birth certificates of children. In case of death away from service, an undertaking by the claimant to the effect that the member was not working / had not worked in any other covered establishment after exit from the establishment on the basis of which pension is being claimed.

Employees Deposit Linked Insurance Scheme, 1976 (EDLI)

This scheme under the Employee Provident Fund Act provides the insurance benefits to the employees up on death of a member while in service. It is linked to the average balance in the provident fund account of deceased member.

Membership - All members of Provident Fund Contribution Employer is required to contribute @ 0.50% of Pensionable Salary. Benefits - On the death while in service of the member, the nominee of the deceased shall in addition to PF/EPS accumulation, be paid an amount equal to the average balance in the PF accumulation of the deceased for the preceding twelve months and if the average balance exceeds Rs. 35,000/- then the amount payable shall be Rs. 35,000/- plus 25% in excess of Rs. 35,000/- subject to a maximum of

Rs. 60,000/-.

Employees Pension Scheme, 1995(EPS)

Introduction - Employees Pension Scheme is a survivor, old age and disability pension scheme. (In force from 16.11.1995 retrospectively with effect from 1.4.1993)

Contribution 8.3 % of Employers contribution towards PF is diverted to Pension Fund.

Type of Pension Members are given different types of pensions.

1. 2. 3. 4. 5.

Monthly members pension will be given after attaining the age of 58 years. In case of permanent and total disablement during the course of employment, Invalidity pension is given. Widow pension for life or until remarriage is given in case of members death while in service or after retirement. Two children of deceased member will get Children pension up to the age of 25 years. If the deceased member has no family, the person who had been nominated by deceased member will get the Nominee pension.

Pension benefits to member are as follows

For the service rendered below 10 yrs

1. 2.

Less than 6 months NIL Return of contribution on exit from employment. The rate gets varied in an increased proportion with the service rendered in no. of years. i.e., for 1 year of service rendered, it may be 1.02 and for 2 years of service rendered, it may be 2.05 etc.

For the service rendered above 10years but below 20 years

1.

A person after attaining the age of 58 years is entitled for pension provided he/she has completed a minimum of 10 years service.

2. 3.

Six months or more shall be treated as one year and the service of less than six months shall be ignored. Pension will be calculated by applying the formula

Pensionable salary * Pensionable service / 70

For the service rendered over 20

Full pension according to the formula stated above.

1.

On rendering 20 years of Pensionable service or more, members Pensionable service shall in all cases be increased by 2 years.

Commutation of pension

1. 2. 3. 4.

Option is available for commutation of pension. Commutation is permissible up to 1/3rd of pension amount. Commuted value will be hundred times of pension amount so commuted. Up on commutation, the balance amount of pension payable shall be monthly pension.

Payment of pension through bank The pension is disbursed through nationalized bank of the respective state.

Scheme certificate The member can get a Scheme certificate when ever needed. Usually the members may ask for a Scheme certificate when he/she is leaving the employment or moving from a covered establishment to an uncovered one etc. It indicates the Pensionable salary and the amount of pension due on the date of exit from employment. When the employee subsequently employed in a covered establishment, the Pensionable service in the certificate will be considered for calculating full Pensionable service.

can also lodge complaint with CIT-TDS of your area of jurisdiction i.e. where the company files the return and also where you file your return and you may mention that: -although MD of the company through the competent employee empowered by him, on his behalf, deducted Rs..........for the months of ..............in year ...........from your salary, for depositing with o/o PF Commissioner............in your PF a/c number................along with employer's contribution, but did not. -on dated...................Mr................designation.................department.....................office address...................stated during your phone call, in a worried situation, from your phone number............................at his phone number.....................he stated that the form 16 of all................years for the period ...............are wrong. This statement of the competent employee of the company mentioned above has compounded your worries, and you would like a thorough investigation to be conducted and without any variance from the rules and laws the culprit company and its MD and competent employee be punished by financial penalty and imprisonment as prescribed under the law of the land. The proceedings of the investigation may kindly be informed to you regularly by letter under original seal and signature of the investigator by registered post and that if the CIT-TDS you are willing to supply the postage prepaid self addressed envelopes. -you have noted that company has deducted the taxes and deposited the same with the govt. authorities as mentioned in your form 16 issued to you by the company. It is serious matter and company is looking for escape routes. Kindly act and do not let them by making a pass on you. You can raise RTI applications from time to time with both he authorities, and obtain the copies of the notices issued to company, reply of the company, noting in file ,reports ,decision, etc.