provident fund
This query is : Resolved
21 December 2007
i want just a brief of the EPF ACT like wat is the minimum and maximum amt on which provident fund amt shud be deducted.....? wat is the last date of depositing the amt......? wa
21 December 2007
Hi Jaspreet,
The details of PF has been briefed hereunder:
For New Entrants:
Enrolment: An employee is eligible for membership from the day he joins the covered establishment.
If the employee’s emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer.
Declare previous employment details, if any, in Form No. 11 to the employer.
On becoming a member of the Schemes file details in Form No. 2 ( family particulars/ nominations) through the employer.
Rate of contribution payable by a member shall be @ 12% of his emoluments.
A member can contribute statutarily over and above the prescribed rate.
For Existing Members:
Enrolment:
Any change in the family status, such as, -
marriage of the member.
additions / deletion in the family.
Legal adoption of the children.
Change of nominee, is to be filed in Form No. 2 through the employer.
In the event the member is holding a Scheme Certificate (under EPS, 95), he should surrender the same to the concerned EPFO office, through his employer.
A member is entitled to various benefits & facilities such as withdrawals, advances, pensions, death insurance etc.
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the whole India except Jammu & Kashmir.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette. (List of Industries/Establishments)
Employing 20 or more persons .
Cinema Theatres employing 5 or more persons.
The Act does not apply to:
The co-operative societies employing less than 50 persons and working without the aid of power. 16(1)(a)
The establishment to which this Act applies shall continue to be governed by this Act , even if the number of employees falls below 20 at a later date. [ 1(5)].
16(1)(b) Establishments under the control of state/central Govt.& employees who are getting benefits in the nature of 16(1) (b) contributory P.F. or old age pension as per rules framed by the Govt.
16(1)(c) Establishment set up under any central, provincial or state act and the employees who are getting benefits in the nature of contributory P.F. or old age pension as per rules.
Voluntary Coverage
If any of the establishment is not satisfying the above two conditions for coverage and if the employer and majority of the employees are willing , the Act may be applicable to such establishment ( voluntary coverage under section 1(4) )
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to 22.9.97 in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) 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.
Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
b) The Employees' Pension Scheme
From and out of employer's share of Provident Fund contributions 8.33% of the total wages limited to Rs. 6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10 ( w.e.f. 1-06-2001 ).
The Central Government also would contribute at the rate of 1.1 / 6% of total wages.
c) Employees' Deposit Linked Insurance Scheme:
No amount is recovered from employee's wages . Employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month ( w.e.f. 1-06-2001 ).
EXEMPTION : PROVISIONS OF ACT / SCHEMES
Types of Exemption
An establishment covered under the Employees' Provident Fund & Miscellaneous Provisions Act 1952 is required to comply with the statutory provisions of the Act and also the provisions of the Schemes framed under the Act namely Employees' Provident Fund Scheme, 1952, Employees' Pension Scheme Scheme, 1995 and Employees' Deposit Linked Insurance Schemes, 1976.
However, the Act provides for grant of exemption from the operation of the Act and also exemption from the operation of the Schemes framed under the Act. Thus, the types of exemptions provided under the Act may be broadly classified as under:
Exemption from the Act ( Including the Schemes ), under Section -16 (2) of the Act.
Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes.
(a) Exemption from the Act ( Including the Schemes ):
This type of Exemption is allowed under Section 16(2) of the Act by the Central Government. Exemption from the Act is allowed only to a class of establishments. It is granted considering the financial or other circumstances of the class of establishments. This exemption can be given prospectively or retrospectively. It is allowed for a specified period only. The classes of establishments for which this type of exemption currently in force are:
Establishments registered under the Societies Registration Act, 1860, run mainly on grants-in-aid received from the Central Government or the State Government. Establishments which are employing only ex-servicemen who are in receipt of pension benefits as admissible under the trust rules for a period of 5 years w.e.f. 18-02-2000. (Notification dated on 5.4.2000)
Voluntary organisations engaged in leprosy eradication programmes.
(b) Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes:
In this type of exemption, it is only an exemption from the operation of a specified scheme and not from the Act. Apart from granting exemption to an establishment from the operation of a particular scheme, the Act also provides for grant of exemption to an individual employee and also to a class of employees. Thus, exemption from the operation of the Scheme is granted:
To an establishment as a whole.
To an individual employee ( under the Employees' Provident Fund & Employees' Deposit Linked Insurance Scheme only )
To a class of employees.
Issue of Relaxation order under the Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes :
Before granting exemption to an establishment the application of the establishment and also the rules of the Fund are required to be scrutinised for considering the grant of exemption. As it may take some time to process the application, the Regional Provident Fund Commissioner / Central Provident Fund Commissioner as the case may be, may issue a relaxation order to the establishment specifying that the establishment may not, pending grant of exemption:
Submit the returns required to be submitted under the Scheme.
Remit the dues to the Fund
Transfer the accumulations from the existing Fund to the C.B.T., Employees' Provident Fund.
The Regional Provident Fund Commissioner / Central Provident Fund Commissioner may also impose certain other conditions on maintenance of accounts, enrolment of members, Investment of monies, payment of inspection charges and submission of returns etc., in the Relaxation Order. For all practical purposes the establishment under Relaxation Order shall be treated on par with the establishment granted exemption. The Relaxation Order is issued under para 28(7) of the Employees' Deposit Linked Insurance Scheme.
Exemption from the operation of Employees'
Provident Fund Scheme , 1952:
Exemption from the operation of Employees' Provident Funds to an establishment as a whole, is granted either under Section 17(1)(a) or under Section 17 (1)(b) of the Act.
Exemption under Section 17 (1)(a):
The grant of exemption to an establishment under Section 17 (1)(a) is considered where the rates of contribution are not less favourable then the statutory rates provided in Section 6 of the Act and the employees are also in enjoyment of other PF benefits which are also on the whole not less favourable than the benefits provided under the Act / Scheme. The authority to grant this exemption is the 'Appropriate Government', as defined in Section 2(a) of the Act ( Central / State Government, as the case may be ) and notified in Gazette.
Exemption under Section 17(1)(b):
Exemption under Section 17 (1)(b) is granted where the employees in establishment are in enjoyment of benefits in the nature of Provident Fund, Pension or gratuity which are separately or jointly on the whole not less favourable than the benefits provided under the Act / Scheme. It is granted by the 'Appropriate Government ', through a notification in the gazette.
Payment of Inspection charges :
The establishment to which Relaxation Order is issued / exemption is granted is required to pay Inspection charges @ 0.18% of total wages on which Provident Fund is recovered, to the Regional Provident Fund Commissioner concerned by deposit in cash / local cheque in S.B.I. to the credit in A/C No. 2 of the Employees' Provident Fund, through prescribed challan.
Exemption of an Employee : (Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27 of the Employees' Provident Fund Scheme provides for exemption from the operation of all or any of the provisions of the scheme to an individual employee. It is granted by the Regional Provident Fund Commissioner on the receipt of application in Form-1 from the employee. The exemption is granted where an employee is entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
The re-election is permitted only once on each account.
Exemption of a Class of Employees : ( Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27A of the Employees' Provident Fund Scheme provides for grant of exemption from the operation of all or any of the provisions of the scheme to a class of employees. It is granted by the appropriate Government on the receipt of application from the employer. The exemption is granted where employees are entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
Wherever the exemption to a class of employees is granted, the employer is required to submit a monthly return to the Regional Provident Fund Commissioner in the prescribed Performa. The due date for submission of this return is 25th of the month following that to which it relates. The employer is required to pay Inspection Charges @ 0.18% on wages of employees exempted and invest the Provident Fund monies in accordance with the pattern of investment prescribed by the Central Government. The class of employee may
The PF challan need to be deposited before 15th of subsequent month in the month in which deduction is made.
Rgds/
Vineet
Hi Jaspreet,
The details of PF has been briefed hereunder:
For New Entrants:
Enrolment: An employee is eligible for membership from the day he joins the covered establishment.
If the employee’s emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer.
Declare previous employment details, if any, in Form No. 11 to the employer.
On becoming a member of the Schemes file details in Form No. 2 ( family particulars/ nominations) through the employer.
Rate of contribution payable by a member shall be @ 12% of his emoluments.
A member can contribute statutarily over and above the prescribed rate.
For Existing Members:
Enrolment:
Any change in the family status, such as, -
marriage of the member.
additions / deletion in the family.
Legal adoption of the children.
Change of nominee, is to be filed in Form No. 2 through the employer.
In the event the member is holding a Scheme Certificate (under EPS, 95), he should surrender the same to the concerned EPFO office, through his employer.
A member is entitled to various benefits & facilities such as withdrawals, advances, pensions, death insurance etc.
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the whole India except Jammu & Kashmir.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette. (List of Industries/Establishments)
Employing 20 or more persons .
Cinema Theatres employing 5 or more persons.
The Act does not apply to:
The co-operative societies employing less than 50 persons and working without the aid of power. 16(1)(a)
The establishment to which this Act applies shall continue to be governed by this Act , even if the number of employees falls below 20 at a later date. [ 1(5)].
16(1)(b) Establishments under the control of state/central Govt.& employees who are getting benefits in the nature of 16(1) (b) contributory P.F. or old age pension as per rules framed by the Govt.
16(1)(c) Establishment set up under any central, provincial or state act and the employees who are getting benefits in the nature of contributory P.F. or old age pension as per rules.
Voluntary Coverage
If any of the establishment is not satisfying the above two conditions for coverage and if the employer and majority of the employees are willing , the Act may be applicable to such establishment ( voluntary coverage under section 1(4) )
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to 22.9.97 in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) 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.
Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
b) The Employees' Pension Scheme
From and out of employer's share of Provident Fund contributions 8.33% of the total wages limited to Rs. 6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10 ( w.e.f. 1-06-2001 ).
The Central Government also would contribute at the rate of 1.1 / 6% of total wages.
c) Employees' Deposit Linked Insurance Scheme:
No amount is recovered from employee's wages . Employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month ( w.e.f. 1-06-2001 ).
EXEMPTION : PROVISIONS OF ACT / SCHEMES
Types of Exemption
An establishment covered under the Employees' Provident Fund & Miscellaneous Provisions Act 1952 is required to comply with the statutory provisions of the Act and also the provisions of the Schemes framed under the Act namely Employees' Provident Fund Scheme, 1952, Employees' Pension Scheme Scheme, 1995 and Employees' Deposit Linked Insurance Schemes, 1976.
However, the Act provides for grant of exemption from the operation of the Act and also exemption from the operation of the Schemes framed under the Act. Thus, the types of exemptions provided under the Act may be broadly classified as under:
Exemption from the Act ( Including the Schemes ), under Section -16 (2) of the Act.
Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes.
(a) Exemption from the Act ( Including the Schemes ):
This type of Exemption is allowed under Section 16(2) of the Act by the Central Government. Exemption from the Act is allowed only to a class of establishments. It is granted considering the financial or other circumstances of the class of establishments. This exemption can be given prospectively or retrospectively. It is allowed for a specified period only. The classes of establishments for which this type of exemption currently in force are:
Establishments registered under the Societies Registration Act, 1860, run mainly on grants-in-aid received from the Central Government or the State Government. Establishments which are employing only ex-servicemen who are in receipt of pension benefits as admissible under the trust rules for a period of 5 years w.e.f. 18-02-2000. (Notification dated on 5.4.2000)
Voluntary organisations engaged in leprosy eradication programmes.
(b) Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes:
In this type of exemption, it is only an exemption from the operation of a specified scheme and not from the Act. Apart from granting exemption to an establishment from the operation of a particular scheme, the Act also provides for grant of exemption to an individual employee and also to a class of employees. Thus, exemption from the operation of the Scheme is granted:
To an establishment as a whole.
To an individual employee ( under the Employees' Provident Fund & Employees' Deposit Linked Insurance Scheme only )
To a class of employees.
Issue of Relaxation order under the Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes :
Before granting exemption to an establishment the application of the establishment and also the rules of the Fund are required to be scrutinised for considering the grant of exemption. As it may take some time to process the application, the Regional Provident Fund Commissioner / Central Provident Fund Commissioner as the case may be, may issue a relaxation order to the establishment specifying that the establishment may not, pending grant of exemption:
Submit the returns required to be submitted under the Scheme.
Remit the dues to the Fund
Transfer the accumulations from the existing Fund to the C.B.T., Employees' Provident Fund.
The Regional Provident Fund Commissioner / Central Provident Fund Commissioner may also impose certain other conditions on maintenance of accounts, enrolment of members, Investment of monies, payment of inspection charges and submission of returns etc., in the Relaxation Order. For all practical purposes the establishment under Relaxation Order shall be treated on par with the establishment granted exemption. The Relaxation Order is issued under para 28(7) of the Employees' Deposit Linked Insurance Scheme.
Exemption from the operation of Employees'
Provident Fund Scheme , 1952:
Exemption from the operation of Employees' Provident Funds to an establishment as a whole, is granted either under Section 17(1)(a) or under Section 17 (1)(b) of the Act.
Exemption under Section 17 (1)(a):
The grant of exemption to an establishment under Section 17 (1)(a) is considered where the rates of contribution are not less favourable then the statutory rates provided in Section 6 of the Act and the employees are also in enjoyment of other PF benefits which are also on the whole not less favourable than the benefits provided under the Act / Scheme. The authority to grant this exemption is the 'Appropriate Government', as defined in Section 2(a) of the Act ( Central / State Government, as the case may be ) and notified in Gazette.
Exemption under Section 17(1)(b):
Exemption under Section 17 (1)(b) is granted where the employees in establishment are in enjoyment of benefits in the nature of Provident Fund, Pension or gratuity which are separately or jointly on the whole not less favourable than the benefits provided under the Act / Scheme. It is granted by the 'Appropriate Government ', through a notification in the gazette.
Payment of Inspection charges :
The establishment to which Relaxation Order is issued / exemption is granted is required to pay Inspection charges @ 0.18% of total wages on which Provident Fund is recovered, to the Regional Provident Fund Commissioner concerned by deposit in cash / local cheque in S.B.I. to the credit in A/C No. 2 of the Employees' Provident Fund, through prescribed challan.
Exemption of an Employee : (Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27 of the Employees' Provident Fund Scheme provides for exemption from the operation of all or any of the provisions of the scheme to an individual employee. It is granted by the Regional Provident Fund Commissioner on the receipt of application in Form-1 from the employee. The exemption is granted where an employee is entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
The re-election is permitted only once on each account.
Exemption of a Class of Employees : ( Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27A of the Employees' Provident Fund Scheme provides for grant of exemption from the operation of all or any of the provisions of the scheme to a class of employees. It is granted by the appropriate Government on the receipt of application from the employer. The exemption is granted where employees are entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
Wherever the exemption to a class of employees is granted, the employer is required to submit a monthly return to the Regional Provident Fund Commissioner in the prescribed Performa. The due date for submission of this return is 25th of the month following that to which it relates. The employer is required to pay Inspection Charges @ 0.18% on wages of employees exempted and invest the Provident Fund monies in accordance with the pattern of investment prescribed by the Central Government. The class of employee may
The PF challan need to be deposited before 15th of subsequent month in the month in which deduction is made.
Rgds/
Vineet
21 December 2007
if the employees emoluments dnt exceed 6500 pm then wat?
21 December 2007
Hi Jaspreet,
If the emoluments doesnot exceeds Rs.6500/- PF deduction is mandatory.
Rgds/
Vineet
If the emoluments doesnot exceeds Rs.6500/- PF deduction is mandatory.
Rgds/
Vineet
21 December 2007
thanx
21 December 2007
can u also tell me abt ESI act and Bonus act...just like the EPF act
02 January 2008
Enrolment: An employee is eligible for membership from the day he joins the covered establishment.
If the employee’s emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer.
Declare previous employment details, if any, in Form No. 11 to the employer.
On becoming a member of the Schemes file details in Form No. 2 ( family particulars/ nominations) through the employer.
Rate of contribution payable by a member shall be @ 12% of his emoluments.
A member can contribute statutarily over and above the prescribed rate.
For Existing Members:
Enrolment:
Any change in the family status, such as, -
marriage of the member.
additions / deletion in the family.
Legal adoption of the children.
Change of nominee, is to be filed in Form No. 2 through the employer.
In the event the member is holding a Scheme Certificate (under EPS, 95), he should surrender the same to the concerned EPFO office, through his employer.
A member is entitled to various benefits & facilities such as withdrawals, advances, pensions, death insurance etc.
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the whole India except Jammu & Kashmir.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette. (List of Industries/Establishments)
Employing 20 or more persons .
Cinema Theatres employing 5 or more persons.
The Act does not apply to:
The co-operative societies employing less than 50 persons and working without the aid of power. 16(1)(a)
The establishment to which this Act applies shall continue to be governed by this Act , even if the number of employees falls below 20 at a later date. [ 1(5)].
16(1)(b) Establishments under the control of state/central Govt.& employees who are getting benefits in the nature of 16(1) (b) contributory P.F. or old age pension as per rules framed by the Govt.
16(1)(c) Establishment set up under any central, provincial or state act and the employees who are getting benefits in the nature of contributory P.F. or old age pension as per rules.
Voluntary Coverage
If any of the establishment is not satisfying the above two conditions for coverage and if the employer and majority of the employees are willing , the Act may be applicable to such establishment ( voluntary coverage under section 1(4) )
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to 22.9.97 in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) 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.
Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
b) The Employees' Pension Scheme
From and out of employer's share of Provident Fund contributions 8.33% of the total wages limited to Rs. 6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10 ( w.e.f. 1-06-2001 ).
The Central Government also would contribute at the rate of 1.1 / 6% of total wages.
c) Employees' Deposit Linked Insurance Scheme:
No amount is recovered from employee's wages . Employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month ( w.e.f. 1-06-2001 ).
EXEMPTION : PROVISIONS OF ACT / SCHEMES
Types of Exemption
An establishment covered under the Employees' Provident Fund & Miscellaneous Provisions Act 1952 is required to comply with the statutory provisions of the Act and also the provisions of the Schemes framed under the Act namely Employees' Provident Fund Scheme, 1952, Employees' Pension Scheme Scheme, 1995 and Employees' Deposit Linked Insurance Schemes, 1976.
However, the Act provides for grant of exemption from the operation of the Act and also exemption from the operation of the Schemes framed under the Act. Thus, the types of exemptions provided under the Act may be broadly classified as under:
Exemption from the Act ( Including the Schemes ), under Section -16 (2) of the Act.
Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes.
(a) Exemption from the Act ( Including the Schemes ):
This type of Exemption is allowed under Section 16(2) of the Act by the Central Government. Exemption from the Act is allowed only to a class of establishments. It is granted considering the financial or other circumstances of the class of establishments. This exemption can be given prospectively or retrospectively. It is allowed for a specified period only. The classes of establishments for which this type of exemption currently in force are:
Establishments registered under the Societies Registration Act, 1860, run mainly on grants-in-aid received from the Central Government or the State Government. Establishments which are employing only ex-servicemen who are in receipt of pension benefits as admissible under the trust rules for a period of 5 years w.e.f. 18-02-2000. (Notification dated on 5.4.2000)
Voluntary organisations engaged in leprosy eradication programmes.
(b) Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes:
In this type of exemption, it is only an exemption from the operation of a specified scheme and not from the Act. Apart from granting exemption to an establishment from the operation of a particular scheme, the Act also provides for grant of exemption to an individual employee and also to a class of employees. Thus, exemption from the operation of the Scheme is granted:
To an establishment as a whole.
To an individual employee ( under the Employees' Provident Fund & Employees' Deposit Linked Insurance Scheme only )
To a class of employees.
Issue of Relaxation order under the Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes :
Before granting exemption to an establishment the application of the establishment and also the rules of the Fund are required to be scrutinised for considering the grant of exemption. As it may take some time to process the application, the Regional Provident Fund Commissioner / Central Provident Fund Commissioner as the case may be, may issue a relaxation order to the establishment specifying that the establishment may not, pending grant of exemption:
Submit the returns required to be submitted under the Scheme.
Remit the dues to the Fund
Transfer the accumulations from the existing Fund to the C.B.T., Employees' Provident Fund.
The Regional Provident Fund Commissioner / Central Provident Fund Commissioner may also impose certain other conditions on maintenance of accounts, enrolment of members, Investment of monies, payment of inspection charges and submission of returns etc., in the Relaxation Order. For all practical purposes the establishment under Relaxation Order shall be treated on par with the establishment granted exemption. The Relaxation Order is issued under para 28(7) of the Employees' Deposit Linked Insurance Scheme.
Exemption from the operation of Employees'
Provident Fund Scheme , 1952:
Exemption from the operation of Employees' Provident Funds to an establishment as a whole, is granted either under Section 17(1)(a) or under Section 17 (1)(b) of the Act.
Exemption under Section 17 (1)(a):
The grant of exemption to an establishment under Section 17 (1)(a) is considered where the rates of contribution are not less favourable then the statutory rates provided in Section 6 of the Act and the employees are also in enjoyment of other PF benefits which are also on the whole not less favourable than the benefits provided under the Act / Scheme. The authority to grant this exemption is the 'Appropriate Government', as defined in Section 2(a) of the Act ( Central / State Government, as the case may be ) and notified in Gazette.
Exemption under Section 17(1)(b):
Exemption under Section 17 (1)(b) is granted where the employees in establishment are in enjoyment of benefits in the nature of Provident Fund, Pension or gratuity which are separately or jointly on the whole not less favourable than the benefits provided under the Act / Scheme. It is granted by the 'Appropriate Government ', through a notification in the gazette.
Payment of Inspection charges :
The establishment to which Relaxation Order is issued / exemption is granted is required to pay Inspection charges @ 0.18% of total wages on which Provident Fund is recovered, to the Regional Provident Fund Commissioner concerned by deposit in cash / local cheque in S.B.I. to the credit in A/C No. 2 of the Employees' Provident Fund, through prescribed challan.
Exemption of an Employee : (Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27 of the Employees' Provident Fund Scheme provides for exemption from the operation of all or any of the provisions of the scheme to an individual employee. It is granted by the Regional Provident Fund Commissioner on the receipt of application in Form-1 from the employee. The exemption is granted where an employee is entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
The re-election is permitted only once on each account.
Exemption of a Class of Employees : ( Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27A of the Employees' Provident Fund Scheme provides for grant of exemption from the operation of all or any of the provisions of the scheme to a class of employees. It is granted by the appropriate Government on the receipt of application from the employer. The exemption is granted where employees are entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
Wherever the exemption to a class of employees is granted, the employer is required to submit a monthly return to the Regional Provident Fund Commissioner in the prescribed Performa. The due date for submission of this return is 25th of the month following that to which it relates. The employer is required to pay Inspection Charges @ 0.18% on wages of employees exempted and invest the Provident Fund monies in accordance with the pattern of investment prescribed by the Central Government. The class of employee may
The PF challan need to be deposited before 15th of subsequent month in the month in which deduction is made.
If the employee’s emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer.
Declare previous employment details, if any, in Form No. 11 to the employer.
On becoming a member of the Schemes file details in Form No. 2 ( family particulars/ nominations) through the employer.
Rate of contribution payable by a member shall be @ 12% of his emoluments.
A member can contribute statutarily over and above the prescribed rate.
For Existing Members:
Enrolment:
Any change in the family status, such as, -
marriage of the member.
additions / deletion in the family.
Legal adoption of the children.
Change of nominee, is to be filed in Form No. 2 through the employer.
In the event the member is holding a Scheme Certificate (under EPS, 95), he should surrender the same to the concerned EPFO office, through his employer.
A member is entitled to various benefits & facilities such as withdrawals, advances, pensions, death insurance etc.
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the whole India except Jammu & Kashmir.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette. (List of Industries/Establishments)
Employing 20 or more persons .
Cinema Theatres employing 5 or more persons.
The Act does not apply to:
The co-operative societies employing less than 50 persons and working without the aid of power. 16(1)(a)
The establishment to which this Act applies shall continue to be governed by this Act , even if the number of employees falls below 20 at a later date. [ 1(5)].
16(1)(b) Establishments under the control of state/central Govt.& employees who are getting benefits in the nature of 16(1) (b) contributory P.F. or old age pension as per rules framed by the Govt.
16(1)(c) Establishment set up under any central, provincial or state act and the employees who are getting benefits in the nature of contributory P.F. or old age pension as per rules.
Voluntary Coverage
If any of the establishment is not satisfying the above two conditions for coverage and if the employer and majority of the employees are willing , the Act may be applicable to such establishment ( voluntary coverage under section 1(4) )
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to 22.9.97 in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) 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.
Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
b) The Employees' Pension Scheme
From and out of employer's share of Provident Fund contributions 8.33% of the total wages limited to Rs. 6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10 ( w.e.f. 1-06-2001 ).
The Central Government also would contribute at the rate of 1.1 / 6% of total wages.
c) Employees' Deposit Linked Insurance Scheme:
No amount is recovered from employee's wages . Employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month ( w.e.f. 1-06-2001 ).
EXEMPTION : PROVISIONS OF ACT / SCHEMES
Types of Exemption
An establishment covered under the Employees' Provident Fund & Miscellaneous Provisions Act 1952 is required to comply with the statutory provisions of the Act and also the provisions of the Schemes framed under the Act namely Employees' Provident Fund Scheme, 1952, Employees' Pension Scheme Scheme, 1995 and Employees' Deposit Linked Insurance Schemes, 1976.
However, the Act provides for grant of exemption from the operation of the Act and also exemption from the operation of the Schemes framed under the Act. Thus, the types of exemptions provided under the Act may be broadly classified as under:
Exemption from the Act ( Including the Schemes ), under Section -16 (2) of the Act.
Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes.
(a) Exemption from the Act ( Including the Schemes ):
This type of Exemption is allowed under Section 16(2) of the Act by the Central Government. Exemption from the Act is allowed only to a class of establishments. It is granted considering the financial or other circumstances of the class of establishments. This exemption can be given prospectively or retrospectively. It is allowed for a specified period only. The classes of establishments for which this type of exemption currently in force are:
Establishments registered under the Societies Registration Act, 1860, run mainly on grants-in-aid received from the Central Government or the State Government. Establishments which are employing only ex-servicemen who are in receipt of pension benefits as admissible under the trust rules for a period of 5 years w.e.f. 18-02-2000. (Notification dated on 5.4.2000)
Voluntary organisations engaged in leprosy eradication programmes.
(b) Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes:
In this type of exemption, it is only an exemption from the operation of a specified scheme and not from the Act. Apart from granting exemption to an establishment from the operation of a particular scheme, the Act also provides for grant of exemption to an individual employee and also to a class of employees. Thus, exemption from the operation of the Scheme is granted:
To an establishment as a whole.
To an individual employee ( under the Employees' Provident Fund & Employees' Deposit Linked Insurance Scheme only )
To a class of employees.
Issue of Relaxation order under the Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes :
Before granting exemption to an establishment the application of the establishment and also the rules of the Fund are required to be scrutinised for considering the grant of exemption. As it may take some time to process the application, the Regional Provident Fund Commissioner / Central Provident Fund Commissioner as the case may be, may issue a relaxation order to the establishment specifying that the establishment may not, pending grant of exemption:
Submit the returns required to be submitted under the Scheme.
Remit the dues to the Fund
Transfer the accumulations from the existing Fund to the C.B.T., Employees' Provident Fund.
The Regional Provident Fund Commissioner / Central Provident Fund Commissioner may also impose certain other conditions on maintenance of accounts, enrolment of members, Investment of monies, payment of inspection charges and submission of returns etc., in the Relaxation Order. For all practical purposes the establishment under Relaxation Order shall be treated on par with the establishment granted exemption. The Relaxation Order is issued under para 28(7) of the Employees' Deposit Linked Insurance Scheme.
Exemption from the operation of Employees'
Provident Fund Scheme , 1952:
Exemption from the operation of Employees' Provident Funds to an establishment as a whole, is granted either under Section 17(1)(a) or under Section 17 (1)(b) of the Act.
Exemption under Section 17 (1)(a):
The grant of exemption to an establishment under Section 17 (1)(a) is considered where the rates of contribution are not less favourable then the statutory rates provided in Section 6 of the Act and the employees are also in enjoyment of other PF benefits which are also on the whole not less favourable than the benefits provided under the Act / Scheme. The authority to grant this exemption is the 'Appropriate Government', as defined in Section 2(a) of the Act ( Central / State Government, as the case may be ) and notified in Gazette.
Exemption under Section 17(1)(b):
Exemption under Section 17 (1)(b) is granted where the employees in establishment are in enjoyment of benefits in the nature of Provident Fund, Pension or gratuity which are separately or jointly on the whole not less favourable than the benefits provided under the Act / Scheme. It is granted by the 'Appropriate Government ', through a notification in the gazette.
Payment of Inspection charges :
The establishment to which Relaxation Order is issued / exemption is granted is required to pay Inspection charges @ 0.18% of total wages on which Provident Fund is recovered, to the Regional Provident Fund Commissioner concerned by deposit in cash / local cheque in S.B.I. to the credit in A/C No. 2 of the Employees' Provident Fund, through prescribed challan.
Exemption of an Employee : (Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27 of the Employees' Provident Fund Scheme provides for exemption from the operation of all or any of the provisions of the scheme to an individual employee. It is granted by the Regional Provident Fund Commissioner on the receipt of application in Form-1 from the employee. The exemption is granted where an employee is entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
The re-election is permitted only once on each account.
Exemption of a Class of Employees : ( Employees' Provident Fund Scheme ,52 )
Section 17 (2) read with para-27A of the Employees' Provident Fund Scheme provides for grant of exemption from the operation of all or any of the provisions of the scheme to a class of employees. It is granted by the appropriate Government on the receipt of application from the employer. The exemption is granted where employees are entitled to benefits in the nature of Provident Fund, gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under the Act and Scheme.
Wherever the exemption to a class of employees is granted, the employer is required to submit a monthly return to the Regional Provident Fund Commissioner in the prescribed Performa. The due date for submission of this return is 25th of the month following that to which it relates. The employer is required to pay Inspection Charges @ 0.18% on wages of employees exempted and invest the Provident Fund monies in accordance with the pattern of investment prescribed by the Central Government. The class of employee may
The PF challan need to be deposited before 15th of subsequent month in the month in which deduction is made.
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Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
Mr.Balamurugan Ranganathan15 November 2024
CAclubindia
