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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 Employees

Provident Fund Act 1952

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) Any other establishment notified by the Central Government even if employing less than 10 persons

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

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

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family obligation, education of children & financing of life Insurance Polices Upto 90% of the PF amount can be withdrawn at the age of 54 years or before one year of actual retirement PF amount of the deceased member is payable to nominees / legal heirs Equal contribution by the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 @ 9.5% PF A/c can be transferred if any member changes from one establishment to other where the PF Scheme is applicable

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 9.5%
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 (Form3A) showing the contributions made by the employees and employer during the year
Penalty 1237% 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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Thank you

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 disablement during service

total

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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 one (revised establishment to another establishment covered ) under the Act / Scheme Application for financing a life insurance policy out 14 of PF A/c To be submitted by a member to withdraw his PF 19 dues on leaving service / retirement / termination In the event of death of member, this form is to be 20 used by a nominee / family member to claim the member's PF accumulation For the use of PF members to avail advances / 31 23 withdrawals as provided in the scheme

Forms For Claiming Benefits Under Pension Scheme Form Purpose

10 C To be submitted by a member to withdraw his EPS fund To be submitted by the first claimant i.e. - member - widow / widower - Orphan - nominee

10 D

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Forms For Claiming Benefits Under EDLI Scheme

Form Purpose

To be submitted by the person eligible to receive 5 (I.F.) the PF A/c dues of the deceased member who died while in services

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Summary
Form
2 Nomination Form 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. Return of members leaving service during the month. Consolidated Statement of dues and remittance By 25th of the following month to which the dues relate. Member's annual Contribution card Consolidated annual contribution statement

Purpose

5 10 12A 3A 6A

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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