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Frequently Asked Questions

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The Employees’ Provident Fund (EPF) is a scheme governed by the Employees’
Provident Fund Organization. EPF basically aims to provide social security and offers
retirement benefits.
The current article covers the basics of EPF; eligibility criteria of EPF; EPF contribution
and distribution thereof; EPF registration procedure for employer and relevant FAQs.
Basics of Employees’ Provident Fund (EPF)-
Broadly speaking, EPF comprises of the following three different schemes-
1. EPF Scheme, 1952 (EPF)- This is an ‘Employees’ Provident Fund Scheme’ which is a
retirement benefit scheme.
2. Pension Scheme, 1995 (EPS)- This is an ‘Employee Pension Scheme’ which aims to
generate pension after the specific age.
3. Insurance Scheme, 1976 (EDLI)- This is an ‘Employee Deposit Linked Insurance
Scheme’ which deals with life insurance cover.

Who is the Eligibility criteria for Employee provident Fund (EPF)?
The eligibility criteria for joining the EPF scheme are-
1. An organization having 20 or more workers/ employees are mandatorily required to
register for EPF Scheme and give EPF benefit to the employees.

2. However, an organization with less than 20 workers/ employees can voluntarily obtain
EPF registration.
3. A salaried employee earning less than INR 15,000 is also mandatorily required to
obtain EPF registration.
EPF Contribution and its distribution thereof-
In general, the employer’s contribution is 12% of basic salary, dearness allowance and
retaining allowance. Accordingly, an equal contribution (i.e., 12%) is paid by the
employee.
However, the EPF contribution rate will be 10% for both employee and employer for the
following organizations-
An organization employing less than 20 employees; or
Organization incurring loss more than or equal to its net worth; or
The organization who is declared sick by the Board for Industrial and Financial
Reconstruction; or
Guar, coir, gum, beedi, brick and jute industries; or
Organization working under the wage limit of INR 6,500.
Notably, a total contribution made by the employer will be distributed in the following
manner-
1. 33% towards Employees’ Pension Scheme (EPS); and
2. 67% toward EPF.
Following additional contribution and administration cost is to be incurred by the
employer, other than above 12%/ 10% contribution-
50% towards Employee Deposit Linked Insurance Scheme (EDLI),
10% towards administration cost of EDLI, and
01% toward administration cost of EPF.
EPF registration procedure for employer-
For obtaining EPF registration, an employer needs to follow the below simple steps-
STEP 1 – Visit site https://www.epfindia.gov.in/site_en/index.php,
STEP 2 – Click the ‘Establishment Registration’ icon available on the homepage,
STEP 3 – Shram Suvidha login page will appear. Click ‘Sign Up’ if the User id and
Password is not available or if available provide the same.
STEP 4 – Navigate the path Registration > Registration Under EPF-ESI,
STEP 5 – Fill up the details accurately and submit the application form.

Employee Provident Fund Organization (EPFO)-
EPFO is a statutory body formed by the Government of India. EPFO manages and
operates all three schemes i.e., EPF; EPS and EDLI. Sample list of services offered by
EPFO is-
1. Online registration,
2. Pay for EPF subscription online,
3. Generate the EPF challan online,
4. Transfer claims online,
5. Address your grievances etc.

EPF is a retirement benefit scheme, wherein, employee and employer contribute in equal
proportion on monthly basis.

A salaried employee earning less than INR 15,000 and an organization having 20 or more
employee is mandatorily required to obtain registration under the EPF scheme. However,
others can also register under the EPF scheme on a voluntary basis.

EPFO is an abbreviation of Employees’ Provident Fund Organization. It is a statutory
body that promotes employees to save funds for the retirement.

From the Financial Year 2021-2022, EPF is taxable in the following manner-
Amount of interest to the extent it relates to Provident Fund contribution exceeding
INR 2.50 Lakhs when there is both employee and employer contribution.
Amount of interest to the extent it relates to Provident Fund contribution exceeding
INR 5 Lakhs when there is only employee’s contribution.

Contribution towards EPF can be done till the age of 58 years. However, the upper age
limit for pension is 60 years.

Employees’ Provident Fund Scheme 1952 and Employees’ Pension Scheme 1995 are
two different types of retirement savings scheme. The first one is a retirement scheme
and the second one is a pension scheme.

Average salary * Pensionable service/ 70 is the formula for calculating pension amount.
Accordingly, the maximum average salary (i.e., Basic + DA) for EPS is considered as INR
15,000 and Maximum pensionable service is considered as 35 years.
Thus, maximum pension one can earn under EPS is = (15,000 * 35)/70 = INR 7,500 per
month.

The minimum pension amount receivable under EPS is INR 3,000, earlier the amount
was INR 1,000.

For viewing the EPF passbook, one needs to follow below steps-
STEP 1 – Visit https://www.epfindia.gov.in/site_en/index.php.
STEP 2 – Navigate path Services > For Employees.
STEP 3 – Click ‘Member Passbook’ and provide Login credentials.
STEP 4 – Click ‘View Passbook’.

In order to avail e-passbook facility one needs to obtain registration under EPFO unified
member portal (i.e., https://unifiedportal-mem.epfindia.gov.in/memberinterface/).

EPF passbook balance is total contributions made by the employee and the employer in
EPF and EPS accounts.

EPF is a retirement benefit scheme which mainly inbuilt habit of saving money to build up
a substantial retirement corpus.

PF (Provident Fund) is a popular name for EPF (Employees Provident Fund). It is a
saving scheme for employees of the organized sectors.

A unified portal is a secure website which is designed to deliver your customers (i.e.,
members, partners, clients etc.) all the information they need in order to be successful.

Follow below steps to login into unified portal-
STEP 1 – Visit https://unifiedportal-mem.epfindia.gov.in/memberinterface/.
STEP 2 – Enter UAN, Password and Captcha.
STEP 3 – Click ‘Sign in’.

Employees State Insurance Corporation is a government organizations that manages ESI
(Employees State Insurance) Scheme.

ESI Scheme is applicable to all the factories/ other establishment as defined in the Act
with 10 or more persons employed and the beneficiaries’ monthly wage not exceeding
INR 21,000.

Following steps are to be followed to activate UANSTEP
1 – Visit https://www.epfindia.gov.in/site_en/index.php.
STEP 2 – Navigate Services > For Employees.
STEP 3 – Click ‘Member UAN/ Online Service (OCS/OTCP).
STEP 4 – Click ‘Activate UAN’ and enter all the mandatory details.
STEP 5 – Click ‘Get Authorization Pin’. Please note, authorization Pin will be received on
registered mobile number.
STEP 6 – Click ‘I Agree’ and enter OTP.
STEP 7 – Click ‘Validate OTP and Activate UAN’.

In case the UAN is not activate, the employee will have to be dependent on the employer
for every small PF related works.

Capital appreciation; corpus for retirement; emergency corpus; tax-savings; easy
premature withdrawal are some of the benefits of joining EPF.

Employees having pay less than INR 15,000 per month is compulsory required to join
EPF scheme.

The obligations of the employers are-
Filing of monthly return before the due date,
Submission of Aadhaar card and other relevant details for the employees who
became member of EPF scheme,
Submissions of details of employees joining/ leaving the service.

Every establishment having 20 or more employees under EPF Act. Exceptionally, it also
covers some establishment which are having less than 20 employees.


DATE OF BIRTH DOCUMENT PROOF HELP FILE
The file should be in pdf format only.
➢ File size should not be greater than 2 MB.
➢ The variation between the date of birth in your AADHAAR and EPF database is more than three year. Hence, please upload a pdf file of any of the following documents:
⚫ Birth Certificate Issued by Registrar of Births and Deaths
⚫ Any school/education related certificate
⚫ Certificate based on service records of PSU/Government
⚫ Passport
⚫ Any other reliable document issued by Government Department
⚫ Medical Certificate by Civil Surgeon

For Proprietorships
Proprietor – PAN, AADHAR, VOTER ID CARD, ELECTRIC BILL / MUTATION CERTIFICATE / MUNICIPAL TAX RECEIPT (Any one needed for resident address proof of Proprietor), Passport Photo (two copies), savings bank account number cancelled one cheque leaf, Mobile Number, email address with password & DSC;

For Partnership Firms / LLP / Company
Partnership Firm – PAN, Partnership Deed, Certificate of registration firm in case of partnership firm / LLP, Company email address with password

List of Partners mentioned in a sheet;

Documents & other proof of all partners required:-

PAN, AADHAR, VOTER ID CARD, ELECTRIC BILL / MUTATION CERTIFICATE / MUNICIPAL TAX RECEIPT (Any one needed for resident address proof), Passport Photo (two copies), savings bank account number cancelled one cheque leaf, Mobile Number, email address with password & Mobile number, email address with password, DSC of Authorized Partner & Authorized Letter of all partners;

Company (Pvt Ltd. or Public)

PAN, MOA / AOA, Certificate of registration of company in case of company, company email address with password;

List of Directors mentioned in a sheet;

Documents & other proof of all directors required:-

PAN, AADHAR, VOTER ID CARD, ELECTRIC BILL / MUTATION CERTIFICATE / MUNICIPAL TAX RECEIPT (Any one needed for resident address proof), Passport Photo (two copies), savings bank account number cancelled one cheque leaf, Mobile Number, email address with password & Mobile number, email address with password, DSC of Authorized Director & Authorized Letter of all directors;

Common Documents Required for All Entities
Trade License; Business address Proof (rent agreement, municipal tax receipt / mutation certificate / electric bill of land lord or in case of own property – municipal tax receipt / mutation certificate / electric bill of land lord / consent party, NOC of consent party ;

P. Tax Enrollment Certificate, P. Tax Registration Certificate, Filed return copies of P. Tax Registration number relating to last financial year;

GST Registration Certificate;

Income Tax return filing details such as IT Return Acknowledgment copy, P & L, Balance Sheet of current assessment year;

Current Bank account statement not older than three months, cancelled cheque leaf with name of the company should be printed onto the cheque leaf;

Provident Fund is a product which helps salaried people to accumulate funds while they are earning for the period the income flow stops. So generally it is not supposed to be withdrawn before its maturity and jeopardise one’s retirement. However there are circumstances when resorting to the money accumulated in the provident fund account becomes inevitable and thus is allowed by the law to be withdrawn partly or fully. Let us discuss the circumstances in which you are allowed to withdraw the money from your Provident Fund.

1.In case without employment or non receipt of salary

Earlier one was allowed to withdraw the full balance in provident fund account and close it if remained unemployed continuously for two month and close the account. In order to help one retain the account and meet expenses while remaining unemployed you can now make an application for withdrawal of 75% of balance in the PR account if you are without any employment for more than one month.

Likewise in a similar situation where though one is still in employment but has not received any salary/wages continuously for 2 months for any reason other than a strike, one is allowed to take advances against the balance in PF account. Likewise in case of lockout or closure of the for more than 15 days and the employee does not receive any wages/salary, one can take advance against balance in PF account. While in employment can take advance upto the amount of own contribution and interest accumulated on such contribution. This facility can be availed any time without any requirement of completion of specific period of employment.

2.For purchase of land or construction or purchase of house or repayment of home loan

Money from PF can be withdrawn for purchase of land for construction of house upto 24 months equivalent of your basic salary and Dearness Allowance (DA). However if you wish to withdraw the month for purchase or construction of a house the eligibility goes upto 36 moths equivalent of salary and D. A. However the withdrawal allowed cannot exceed the employee’s own contribution and interest accumulated on it. The total eligibility in both the cases cannot exceed cost of the land or cost of construction or purchase price of the house. The assets need to be purchased in the name of either the subscriber or spouse of the subscriber or jointly by both.

It is not for buying the land or house that you are allowed to withdraw money from PF but also for repayment of your existing home loan that you can resort to it. You can withdrawn upto 90% of your balance in PF account for repaying your home loan outstanding provided that at least 10 years contributions have been made in the account and there is a minimum balance of Rs. 20000/- in the PF account.

3.Withdrawal for illness, education or marriage in the family

One can withdraw from PF for the purpose of medical treatment of any member in the family including the subscriber. The withdrawal for this purpose is restricted to an amount equal to the basic salary and DA for 6 months at the time of withdrawals restricted however to aggregate of his own contribution in the PF account. You can avail this withdrawal facility for surgery or treatment of any disease which requires hospitalisation for more than one month. The requirement of hospitalization for more than one month is a condition which is difficult to satisfy these days as there are hardly any treatment which require hospitalisation for 30 days or more.

Likewise you one can withdraw from your PF account for the purpose of marriage of any members in the family like subscriber himself, any siblings and children as well as for meeting the educational expenses for children. The amount which you can withdraw for both the purposes is restricted to 50% of your own contribution with interest accumulated thereon. You can avail this withdrawal facility for both these purposes if you have contributed to the PF for minimum of 7 years on the date of making the application for withdrawal. For the purpose of withdrawing the money for education purpose, certificate from the educational institution where the child is going to pursue the studies is required to be submitted. You can not avail this facility more than three time during currency of the PF account.

4.Withdrawal- facility within one year before retirement

The Provident fund rules also allow you to withdraw upto 90% of the accumulated balances in your PF account any time after you have completed 54 years of your age. This facility however can only be exercised within one year before the age of retirement or superannuation stipulated in your organisation. Once you retire from your employment you can withdraw the full balance any time and as much as you want.

The Government of India has taken a historic decision to reduce the rate of contribution under the ESI Act from 6.5% to 4%(employers’ contribution being reduced from 4.75% to 3.25% and employees’ contribution being reduced from 1.75% to 0.75%). Reduced rates will be effective from 01.07.2019.This would benefit 3.6 crore employees and 12.85 lakh employers.

The reduced rate of contribution will bring about a substantial relief to workers and it will facilitate further enrollment of workers under the ESI scheme and bring more and more workforce into the formal sector. Similarly, reduction in the share of contribution of employers will reduce the financial liability of the establishments leading to improved viability of these establishments. This shall also lead to enhanced Ease of Doing Business. It is also expected that reduction in rate of ESI contribution shall lead to improved compliance of law.

The Employees’ State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability and dependent benefits to the Insured Persons under the Act. The ESI Act is administered by Employees’ State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the contributions made by the employers and the employees.

Under the ESI Act, employers and employees both contribute their shares respectively. The Government of India through Ministry of Labour and Employment decides the rate of contribution under the ESI Act. Presently, the rate of contribution is fixed at 6.5% of the wages with employers’ share being 4.75% and employees’ share being 1.75%. This rate is in vogue since 01.01.1997.

The Government of India in its pursuit of expanding the Social Security Coverage to more and more people started a programme of special registration of employers and employees from December, 2016 to June, 2017 and also decided to extend the coverage of the scheme to all the districts in the country in a phased manner. The wage ceiling of coverage was also enhanced from Rs. 15,000/- per month to Rs. 21,000/- from 01.01.2017.

These efforts resulted in substantial increase in the number of registered employees i.e. Insured Persons and employers and also a quantum jump in the revenue income of the ESIC.The figures are as under: –

The Government of India is committed to the cause of welfare of employees as well as employers.

It is also committed to improve the quality of medical services & other benefits being provided under the ESI scheme.

1. Employees must be registered online within 10 days from their date of joining. Thereafter employees can not be registered. (Normally registration of the employees is done while preparing e-Challan that is after the closure of wage period. Now it’s to be done from the date of joining of the employee or else system will not accept the employee done with back date)

2. Monthly ESI Contribution can not be paid after 42 days from the due date. (No clarity as to how to pay ESI Contribution for back period)

3. Employee whose per day salary is Rs. 176/- or less need not to pay Employee’s contribution and the same will be paid by Govt. However, Employer will have to pay their share of contribution. (Part time employees might get benefit of the same)

4. Employee will have to collect their Biometric ESI Permanent Card from nearest Branch Office. (Earlier Employer used to issue it)

EPFO has issued a notification dated 15.03.2017 under which EPF admin charges has been reduced to 0.65 percent from 0.85 percent earlier. Earlier EPFO had reduced the charges from 1.10 percent to 0.85 percent from 01.01.2015.

The new rate of 0.65 percent is applicable on contribution for the month of April-2017 ,so you have to pay 0.85 percent for the contribution of March-2017.

PRESENT RATES OF CONTRIBUTION UNDET EPF

 

BY

EMPLOYEE

EMPLOYER

CONTRI -BUTION

EPF

12% /10% ##

Difference of EE share and Pension Contribution       12.00-8.33=3.67

EPS

0

8.33% ##

EDLI

0

0.5% ##

ADMIN CHARGES

EPF @@

0

0.65% !!
[w.e.f. 01-04-2017]

EDLI @@

0

0.01% $$

TOTAL

25.16

12

13.16

10% rate is applicable for

· Any establishment in which less than 20 employees are employed.

· Any sick industrial company 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 and

· Any establishment in following industries:-

o (a) Jute (b) Beedi (c) Brick ( d) Coir and (e) Guar gum Factories.

## Contribution is rounded to the nearest rupee for each employee, for the employee share, pension contribution and EDLI contribution. The Employer Share is difference of the EE Share (payable as per statute) and Pension Contribution.

!! Monthly payable amount under EPF Administrative charges is rounded to the nearest rupee and a minimum of Rs 500/- is payable.

Note:- If the establishment has no contributory member in the month, the minimum administrative charge will be Rs 75/-

$ $ Monthly payable amount under EDLI Administrative charges is rounded to the nearest rupee and a minimum Rs 200/-is payable.

Note:- If the establishment has no contributory member in the month, the minimum administrative charge will be Rs 25/-

@@ In case Establishment is exempted under PF Scheme, Inspection charges @0.18%, minimum Rs 5/- is payable in place of Admin charges.

In case the Establishment is exempted under EDLI Scheme, Inspection charges @ 0.005%, minimum Re 1/- is payable in place of Admin charges.

Notes: UNDER EPF

· The contributions are payable on maximum wage ceiling of Rs 15000/- by employee and employer.

· The employee can pay at a higher rate and in such case employer is not under any obligation to pay at such higher rate.

· To pay contribution on higher wages, a joint request from Employee and employer is required [Para 26(6) of EPF Scheme]. In such case employer has to pay administrative charges on the higher wages (wages above 15000/-)

· For an International Worker, wage ceiling of 15000/- is not applicable.

UNDER EPS

· Contribution is payable out of the employer’s share of PF and no contribution is payable by employee.

· Pension contribution not to be paid:

o When an employee crosses 58 years of age and is in service (EPS members ceases on completion of 58 years).

o When an EPS pensioner is drawing Reduced Pension and re-joins as an employee.

§ In both the cases the Pension Contribution @8.33% is to be added to the Employer Share of PF. (Pension contribution is not to be diverted and total employer share goes to the PF).

o In case an employee, who is not existing EPF/EP member joins on or after 01-09-2014 with wages above Rs 15000/-

§ In these cases the pension contribution part will be added to employee share, EPF.

· In all other cases Pension Contribution is payable. A member joining after 50 years age, if not a pensioner does not have choice of not getting the Pension Contribution on grounds that he will not complete 10 years of eligible service. The social security cover is applicable till he/she is a member.

· For International Worker, higher wage ceiling of 15000/- is not applicable from 11-09-2010.

· Note:- In case an existing EPS member (as on 01-09-2014)whose Pension contribution was paid erstwhile EPS wage ceiling of 6500/- contribution to contribution above Rs 15000/- wage ceiling from 01-09-2014 he will have to give a fresh consent and an amount of 1.16% on wages above 15000/- will have to be contributed by him in pension Fund (A/C No 10) through the employer.

UNDER EDLI:

1. Contribution to be paid on up to maximum wage ceiling of 15000/- even if PF is paid on higher wages.

2. Each contribution is to be rounded to nearest rupee. (Example for each employee getting wages above 15000, amount will be 75/-)

3. EDLI contribution to be paid even if member has crossed 58 years age and pension contribution is not payable. This is to be paid as long as the member is in service and PF is being paid.

Penalty Provision in respect of delay in payment of P.F. dues

1. Delay in deposit of P.F. dues attracts penal damages. Damages are levied at the following FLAT RATES:

· For 0 — 2 months delay – @ 5 % p.a.

· For 2 — 4 months delay – @10 % p.a.

· For 4 — 6 months delay – @ 15 % p.a.

· For delay above 6 months – @ 25 % p.a. (subject to a maximum of 100%)

 

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