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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-
Deposit-Linked Insurance Scheme
(EDLI) 1976

‡ List of Forms a
r Salary consists of two parts i.e. earnings &
deductions
r Provident Fund is one of the statutory deduction
done by the employer at the time of salary
payment
r Provident Fund is governed by the Employee¶s
Provident Fund Act 1952

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‡ 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

 
 

‡ Every industry employing 10 or more persons (180
industries are specified in Schedule 1 of the Act)
¦
 
 
  



‡ 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
‡ 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
÷
0 

‡ 12
12%% contribution by the employee is directly
transferred to his Provident Fund A/c
‡ 12
12%% is contributed by the employer out of which
8.33%
33% is credited to Employee Pension Fund and
the balance 3.6767%% is transferred to PF A/c of the
employee
‡ 1.10%
10% Administration charges on total wages are
payable by the employer

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‡ 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%



‡ 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

„  


 „

‡ 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
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

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 à
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‡ PF A/c settled immediately under the circumstances
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

circumstances;;
 Resignation from the services
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„   


‡ 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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‡ 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
(Form--5)
‡ Provide list of employees leaving service during the
preceding month (Form
(Form--10
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 nono.. of members last month, new
members joined and existing members resigned in the
preceding month & total no no.. of present subscribers to
be fund (Form
(Form--12
12A)
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„  
 
‡ Employer shall send to the Commissioner within one month of
the close of the year, a consolidated Annual Contribution
Statement (Form
(Form--6A) and individual employee sheet (Form
(Form--
3A) showing the contributions made by the employees and
employer during the year



‡ 12
12±±37
37%% interest is payable for the delayed period in remitting
contributions/ administrative charges depending upon the
delayed period



‡ 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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‡ Provide details of self & nominees (Form
(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)
Fund)..
‡ Voluntary PF can be upto 100100%% 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 /
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middlemen
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‡ 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
pre
force by diverting 8.33
33%
% contribution made by employer
towards PF scheme

„ 

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

 
 
‡ 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 m
disablement during service
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‡ 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

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‡ EDLI is calculated on EDLI slab ± Rs
Rs.. 6500/
6500/-
‡ 0.50%
50% EDLI calculated on total EDLI slab (Rs (Rs.. 6500)
6500)
wages and transferred to EDLI fund
‡ 0.01%
01% EDLI Administration charges calculated on total
EDLI wages
‡ EDLI / administration charges are payable by the
employer
a
 
 
‡ Person who is eligible to receive PF dues of
deceased member who died while in service is
only eligible to receive EDLI fund



‡ 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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2 Nomination Form

Return of Employees qualifying for membership to the Employees' Provident

5 Fund for the first time during every month
month.. Within 15 Days of the following
month..
month
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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
a—
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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
6500/-
Provident fund and employees drawing above
Rs 6501/-
6501/- have an option to become member
of the Provident Fund .
‡ Q3) Is it beneficial for employees who draw
salary above Rs 6501/-
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
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
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
6501//- but after some
period of time their basic increases above Rs 65016501//-
have to compulsorily continue to be member of
provident Fund.
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.
death. If he has a family, he has to
nominate one or more person belonging to his family
and none other.
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
family
as per the Acts.
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.
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.
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
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-
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.
Govt. is paid on the amount standing
to the credit of an employee as on 1st April
every year.
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:
Pension: Member who has
rendered eligible service of 20 years and
retires on attaining the age of 58 years
years..
‡ Retirement Pension:
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..
years
‡ Short service Pension:
Pension: Member has to render
eligible service of 10 years and more but less
than 20 years.
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
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.
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. No. & the complete
address of the Bank where you hold the
account..
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
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
account.. This statement is
sent by the PF department on completion of
the financial year.
year.
Q22 ) Which establishments are covered by
the Act ?
‡ Ans : Any establishment which employs 20 or
more employees.
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.
Rs 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.
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.
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.
Act.
‡ Q26
26)) 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.
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.
month. The Company becomes
the Principal Employer would be responsible
for the PF deduction of the workers employed
on contract basis.
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 ³
employee ´ under the Employee's Provident
Finds Act, 1952,
1952, and as such, they are covered
under the Scheme.
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
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.
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.
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..
deducted
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