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• The Employee’s Provident Funds Act 1952

• Employer role & responsibility


• Employee role & responsibility
• The Employees Pension Scheme 1995
• The Employees Deposit-Linked Insurance Scheme (EDLI) 1976
• List of Forms

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Salary consists of two parts i.e. earnings & deductions
Provident Fund is one of the statutory deduction done by the
employer at the time of salary payment
Provident Fund is governed by the Employee’s Provident
Fund Act 1952

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Introduction
• Provident Fund has come into force to give better future to
employees on their retirement & his dependants in case of
his death during employment
• The Employees Provident Funds Act 1952 is compulsory
contributory fund for the future of an employee after
retirement or for his dependents in case of his early death
• Act is applicable to all states of India except Jammu and
Kashmir

Eligibility
• Every industry employing 10 or more persons (180
industries are specified in Schedule 1 of the Act)
• Every industry employing 10 or more persons which the
Central Govt. may notify
• Any other establishment notified by the Central Government
even if employing less than 10 persons 4
Eligibility & Entitlement
• Every employee employed directly / through a contractor who is in
receipt of wages are eligible to become a member of the fund
(exception - Apprentice under the Apprentices Act and casual
laborers)
• Irrespective of permanent / probationary employees, all employees
are eligible for joining the PF scheme from the date of joining the
service
• Minimum 10% of the basic pay for establishments employed less
than 10 persons; sick industries declared by necessary authority;
Jute, Beedi , Brick, Coir & Guar Gum Industries / Factories
• Other industries maximum 12% of the basic pay
• A member can contribute voluntarily more than statutorily
prescribed rate (upto 100% of basic salary) which will be
transferred to his PF A/c

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Calculation
• 12% contribution by the employee is directly transferred to his
Provident Fund A/c
• 12% is contributed by the employer out of which 8.33% is
credited to Employee Pension Fund and the balance 3.67% is
transferred to PF A/c of the employee
• 1.10% Administration charges on total wages are payable by
the employer
• 0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages
and payable by the employer towards EDLI fund
• 0.01% EDLI Administration charges calculated on total EDLI
slab wages are payable by the employer

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Benefits
• Employees can take advances / withdraw the PF in
case of retirement, medical care, housing, family
obligation, education of children & financing of life
Insurance Polices
• Upto 90% of the PF amount can be withdrawn at the
age of 54 years or before one year of actual
retirement
• PF amount of the deceased member is payable to
nominees / legal heirs
• Equal contribution by the employer
• present interest rate @ 8.5%
• PF A/c can be transferred if any member changes
from one establishment to other where the PF
Scheme is applicable 7
Interest
• Interest is credited to the members PF A/c on monthly
running balance
• Interest rate is fixed by the Central Government in
consultation with the Central Board of trustees of EEPF
every year during March / April
• The present rate of interest is 8.5%

Nomination
• The member can nominate other person / persons to
receive the Fund amount in the event of his death
• The nomination details provided by the members are
maintained at the Regional Provident Fund Office for use
in the event of death of the member

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Annual Statement of Account
• After the close of each year of contribution, annual statement of
account will be sent to each member through establishment
where the member was last employed through form 23.

• Form 23 will show the opening balance at the beginning of the


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

• If any error is noticed in Form 23, the member shall bring the
same to the notice of the PF Office through employer within 6
months from the date of receipt of the statement

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Full Settlement
• 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 (VRS)
– Permanent migration from India to settle abroad / taking employment
– For female members leaving service for getting married

• PF A/c settled after two months under the circumstances;


– Resignation from the services
 

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Advances / Withdrawals
• Purchase of site for construction of House / purchase of
flat
• Additions / alterations / improvements to the house
• Repayment of loan
• Hospitalization for more than a month / major surgical
operation / suffering from TB, Leprosy, Paralysis,
Cancer, Heart ailment etc
• Marriage of self / son / daughter / sister / brother
• Education of son / daughter
• Physically handicapped member for purchasing an
equipment to minimize the hardship due to handicap

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Employer Role & Responsibility

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Monthly Returns
• Filing monthly PF returns with the EPFO within 15 days of
the close of each month
• Provide list of new employees joined in the establishment
during the preceding month & are qualified to become
member in fund (Form-5)
• Provide list of employees leaving service during the
preceding month (Form-10)
• Employer should file 'Nil' returns if there is no new employee
or no employee leaving the service during the preceding
month
• Provide the total no. of members last month, new members
joined and existing members resigned in the preceding
month & total no. of present subscribers to be fund
(Form-12A)
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Annual Returns
• Employer shall send to the Commissioner within one month of the
close of the year, a consolidated Annual Contribution Statement
(Form-6A) and individual employee sheet (Form-3A) showing
the contributions made by the employees and employer during the
year

Penalty
• 12–37% interest is payable for the delayed period in remitting
contributions/ administrative charges depending upon the delayed
period

Exemption
• Employer can seek exemption from the Scheme if similar / better
benefits are provided other than the Scheme by forming a
Voluntary PF Trust which will work under the rules & regulations of
EPFO
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Employee Role & Responsibility

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• Provide details of self & nominees (Form-2) for PF &
Pension Scheme at the time of joining the establishment
• In case of already having PF A/c, apply for transfer of
previous A/c to the present A/c
• If willing to increase contribution, inform the same to the
employer to deduct the amount from the salary
(Voluntary Provident Fund).
• Voluntary PF can be upto 100% of wages
• Understand that the employer is not liable to pay any
contribution on voluntary PF
• Understand that Employees' Provident Fund
Organization does not have any agent / middlemen

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Employees Pension Scheme 1995

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Introduction
• To give long term protection / financial security to employee upon
retirement and his family in case of his pre-mature death, family
pension scheme has come into force by diverting 8.33%
contribution made by employer towards PF scheme

Application
• Scheme is compulsory for all the existing members who become
members of the Employees Provident Fund Scheme

Eligible
• Monthly pension to employees on retirement
• Widows on death of the member
• Children of the member below 25 years age
• Monthly pension to members upon permanent total disablement
during service

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The Employees Deposit-Linked
Insurance Scheme 1976
(EDLI)

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Application
• EDLI scheme is compulsory for all the existing members
who become members of the PF Scheme
• Life insurance benefit (death coverage) of the employee is
available under this scheme while in service

Calculation
• EDLI is calculated on EDLI slab – Rs. 6500/-
• 0.50% EDLI calculated on total EDLI slab (Rs. 6500)
wages and transferred to EDLI fund
• 0.01% EDLI Administration charges calculated on total
EDLI wages
• EDLI / administration charges are payable by the employer

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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
employees

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List of Forms

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Forms For Claiming Benefits Under PF Scheme

Form Purpose
13 For transferring the PF A/c of a member from
(revised one establishment to another establishment
) covered under the Act / Scheme
14 Application for financing a life insurance
policy out of PF A/c
19 To be submitted by a member to withdraw his
PF dues on leaving service / retirement /
termination
20 In the event of death of member, this form is
to be used by a nominee / family member to
claim the member's PF accumulation
31 For the use of PF members to avail
advances / withdrawals as provided in the23
Forms For Claiming Benefits Under Pension Scheme

Form Purpose

10 C To be submitted by a member to withdraw his


EPS fund

10 D To be submitted by the first claimant i.e.


- member
- widow / widower
- Orphan
- nominee

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Forms For Claiming Benefits Under EDLI Scheme

Form Purpose

5 (I.F.) To be submitted by the person eligible to


receive the PF A/c dues of the deceased
member who died while in services

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Summary

Form Purpose
2 Nomination Form

5 Return of Employees qualifying for membership to the Employees' Provident


Fund for the first time during every month. Within 15 Days of the following
month.
10 Return of members leaving service during the month.

12A Consolidated Statement of dues and remittance By 25th of the


following month to which the dues relate.

3A Member's annual Contribution card 

6A Consolidated annual contribution statement

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January
•Before 15th P.F., P.F. Challan
•Before 25th P.F Form 5, 10 & 12A(P.F)
•Monthly statutory register daily/end of the month
(Monthly statutory register should be maintained)
February
•Same as January month
March
•Before 15th P.F., P.F. Challan
•Before 25th P.F Form 5, 10 & 12A(P.F)
•P.F, P.F. Annual Returns form 6A & 3A
•Monthly statutory register daily/end of the month
(Monthly statutory register should be maintained)
April to December
•Same as January month
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FAQ

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• Q1) What is the Contribution for Provident
Fund both by the Employer & Employee ?

• Ans : The Employee contributes 12% of his


/her Basic Salary & the same amount is
contributed by the Employer.
• Q2) Is it Compulsory for the all the employees to
contribute to the Provident Fund ?

• Ans : Employees drawing basic salary upto Rs 6500/-


have to compulsory contribute to the Provident fund
and employees drawing above Rs 6501/- have an
option to become member of the Provident Fund .
• Q3) Is it beneficial for employees who draw
salary above Rs 6501/- to become member of
Provident Fund ?

• Ans Yes because provident fund contribution


by the employer & employee is not a taxable
income for Income Tax purpose.
• Q4) What if an employee while joining establishment has a
basic salary of Rs 4200 and after some period of time his
basic salary increases above Rs 6501/-, does he have an
option to terminate his member ship form the Provident fund
act?
• Ans : Employee who while joining the organisation has a
basic salary above Rs 6501/- have an option to either
become or avoid becoming member of Provident fund but
employees whose basic salary while joining the organisation
is less then Rs 6501/- but after some period of time their
basic increases above Rs 6501/- have to compulsorily
continue to be member of provident Fund.
• Q5) What is the contribution percentage to the
Provident fund and Pension Scheme ?

• Ans : Employers contribution of 12% of basic salary is


totally deposited in provident fund account Whereas
out of Employees contribution of 12% , 3.67% is
contributed to Provident fund and 8.33% is deposited
in Pension scheme.
• Q6) Which form has to be filled while
becoming member of provident fund ?

• Ans : Nomination Form No 2 has to be filled


to become a member of the Provident fund,
form is available with HR department .
• Q7 ) Which form has to be filled while
transferring provident fund deposit ?

• Ans : You just have to fill form no 13 to


transfer your P.F amount
Q8 ) What is the provision of the scheme in
the matter of nomination by a member ?

• Ans : Each member has to make a nomination to receive the


amount standing to his credit in the fund in the event of his death. If
he has a family, he has to nominate one or more person belonging
to his family and none other. If he has no family he can nominate
any person or persons of his choice but if he subsequently acquires
family, such nomination becomes invalid and he will have to make
a fresh nomination of one or more persons belonging to his family.
You cannot make your brother your nominee as per the Acts.
• Q9 ) When is an employee eligible to enjoy
pension scheme ?

• Ans : For an employee to become eligible for


Pension fund, he has to complete membership
of the Fund for 10 Years.
• Q10 ) What does it mean by continuous service of ten
years ?
• Ans : When we say continuous service of 10 years in
Employee Pension Fund, we mean to say that during
services, for e.g., an employee who has worked with X
company for say 3 years, then he resigned from that
organisation and joined Y company, wherein he worked for
2 years, then resigned from there to join establishment for 5
years but during these 10 years of service he has not
withdrawn but transferred his Employee pension fund, then
we say continuous service of ten years.
• Q11 ) When can an employee avail the benefit
of Employee pension fund scheme which he
has contributed during his ten years of
continues service
• Ans : An employee can avail the benefit after
completion of 58 years of service.
• Q12 ) What happens to the provident fund &
Employee Pension fund if an employee who
wants to resign from the service before
completion of ten years of continues service?
• Ans : Employee can withdraw the PF
accumulations by filling Forms 19 & 10 C
which is available with the HR department.
• Q13 ) What is this 19 & 10C form ?

• Ans : Form No 19 is for Provident fund


withdrawal & Form No. 10 C is for Pension
scheme withdrawal.
• Q14 ) Do we get any interest on the amount
which is deposited in the Provident Fund
account?

• Ans : Compound interest as declared by the


Govt. is given for every year of service.
• Q15 ) What is the accounting year for
Provident fund account?

• Ans : Accounting year is from March to


February.
• Q16 ) What are the benefits provided under
Employee Provident Fund Scheme?
• Ans : Two kinds of benefits are provided under
the scheme-

• a) Withdrawal benefit

• b) Benefit of non -Refundable advances


• Q17 ) What is the interest on the PF accumulations
?

• Ans : Compound interest as declared by Central


Govt. is paid on the amount standing to the credit
of an employee as on 1st April every year.
• Q18 ) What is the purpose of the Employee's Pension
Scheme ?

• Ans : The purpose of the scheme is to provide for


• 1) Superannuation pension.

• 2) Retiring Pension.

• 3) Permanent Total disablement Pension


• Superannuation Pension: Member who has
rendered eligible service of 20 years and
retires on attaining the age of 58 years.
• Retirement Pension: member who has
rendered eligible service of 20 years and
retires or otherwise ceases to be in
employment before attaining the age of 58
years.
• Short service Pension: Member has to render
eligible service of 10 years and more but less
than 20 years.
• Q19 ) How much time does it take to receive P.F &
pension money if an employee resigns from the
Service?
• Ans : Normally the procedure for receiving P.F &
Pension money is , the employee has to fill 19 & 10 c
Form and submit the same to PF Desk , which is then
submitted to the P.F office after two months, this two
months is nothing but a waiting period as the rules are
that an employee should not be in employment for
two months after resigning if he has to withdraw his
P.F amount. After completion of two months the form
is submitted to the regional provident fund
Commissioner office after which the employee
receives his amount along with interest within a
period of 90 days.
• Q20 ) Do we receive money through postal
order ?
• Ans Previously there was a procedure wherein
member use to get P.F through Postal order but
now While submitting the P.F form withdrawal
form you have to mention your saving Bank
account No. & the complete address of the
Bank where you hold the account.
Q21 ) How would I know the amount of
accumulations in my PF account ?

• Ans : PF office sends an annual statement through the


employer which gives details about the PF
accumulations. The statement contains details like,
Opening balance, amount contributed during the year,
withdrawal during the year, interest earned and the
closing balance in the PF account. This statement is
sent by the PF department on completion of the
financial year.
Q22 ) Which establishments are covered by
the Act ?
• Ans : Any establishment which employs 20 or
more employees. Except apprentice and casual
laborers, every Employee including contract
labour who is in receipt of basic salary up to
Rs. 6500 p.m. is covered by the Act.
• Q23 ) In case after registering the establishment
at any point in time, the number of employees
working in it becomes less than 20 then will the
Act apply ?
• Ans : Any establishment which has been
covered under the Act once shall continue to be
governed by the Act even if the number of
persons employed therein at any time falls
below 20.
• Q24 ) Is the Act applicable to a factory which
is closed down but is employing a few
employees to look after the assets of the
establishment ?
• Ans : No, Where the establishment is closed
down and only four security men are
employed for keeping a watch over the assets
and properties of the establishments, the Act
would not be applicable.
• Q25 ) Is a trainee an employee under the Act ?

• Ans : Yes, a trainee would be considered as an


employee as per the Act but in case the trainee
is an apprentice under the Apprentice's Act
then he/ she will not be considered as an
employee under this Act.
• Q26) Is it possible to appeal the orders of the
Central Government or the Central Provident
Fund Commissioner ?
• Ans : Yes, there is a body called as Provident
Fund Appellate Tribunal where an employer
can appeal.
• Q27 ) Who is the authority to decide regarding the
disputes if any ?

• Ans : In case there is a dispute regarding the


applicability of the Act or the quantum of money
to be deducted etc. the authority to decide are the
• I) Central Provident Fund Commissioner,
• ii) any Additional Provident Fund
Commissioner,
• iii) any Additional Central Provident Fund
Commissioner
• iv) any Deputy Provident Fund Commissioner
• v) any Regional Provident Fund Commissioner
or
• vi) any Assistant Provident Fund Commissioner
• Q28 ) What in case there are workers involved
as Contract labour ?
• Ans : It is the responsibility of the Contractor
to deduct the PF and submit a statement to the
Principal Employer in the prescribed format by
7th of every month. The Company becomes
the Principal Employer would be responsible
for the PF deduction of the workers employed
on contract basis.
• Q29 ) Are the persons employed by or through a
contractor covered under the Scheme ?

• Ans : Persons employed by or through a contractor


are included in the definition of “ employee ” under
the Employee's Provident Finds Act, 1952, and as
such, they are covered under the Scheme.
• Q30 ) In case the Contractor fails to deduct and submit the
PF amount from the contract workers then what is to be
done ?
• Ans : The Company being the Principal employer is
responsible for the PF to be deducted from the Contract
workers as well. In case the Contractors fails to deduct and
submit the PF dues then the Company has to pay the amount
and can later on recover the amount from the Contractor.
• Q31 ) Could the employer be punished in case
the remittance of contribution by him is delayed
in a Bank or post office ?

• Ans : Employer cannot be punished or penalized


in case there is a delay in the remittance of the
contribution on account of delay in Bank or post
office.
• Q32 ) What happens in case there is a salary
revision and a raise in the basic salary of the
employee and arrears need to be paid, Do we
need to deduct PF from the arrears as well ?

• Ans : Arrears are considered to be emoluments


earned by the employee and PF is to be
deducted from such arrears.
• Q33 ) Is it possible for an employee to contribute at a
higher rate of interest than 12 % ?

• Ans : Yes, if an employee desires to contribute an


amount at a higher rate of interest than 12 % of basic
salary then they can do so but it does not become
obligatory for the employer to pay anything above
than 12 %.This is called voluntary contribution and a
Joint Declaration Form needs to be filled up where
the employer and the employee both have to give a
declaration as to the rate at which PF would be
deducted.
Thank You