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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.
• 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
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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
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Forms For Claiming Benefits Under EDLI Scheme
Form Purpose
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Summary
Form Purpose
2 Nomination Form
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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 ?
• a) Withdrawal benefit
• 2) Retiring Pension.