The document provides an overview of the Employee Provident Fund Act of 1952 in India. It discusses key aspects such as scope, eligibility, contributions, withdrawals, settlements, forms and returns, benefits, and penalties. The EPF is a mandatory savings program for employees in India that aims to provide social security benefits. Both employers and employees contribute equally to the fund at a rate of 12% each, and the accumulated savings can be withdrawn at retirement or under other circumstances.
Employees Provident Fund And MIscellaneous Provisions Act , 1952Mohd Zaid
The Employees Provident Funds Bill having been passed by both the houses of the Parliament received the assent of the president of india on the 4th march 1952.
It came on the statue book as the Employees Provident Funds Act , 1952.
Now it stands as The Employees Provident Funds And Miscellaneous Provisions Act , 1952 ( 19 of 1952 )
Employees Provident Fund And MIscellaneous Provisions Act , 1952Mohd Zaid
The Employees Provident Funds Bill having been passed by both the houses of the Parliament received the assent of the president of india on the 4th march 1952.
It came on the statue book as the Employees Provident Funds Act , 1952.
Now it stands as The Employees Provident Funds And Miscellaneous Provisions Act , 1952 ( 19 of 1952 )
Dear Seniors & Friends,
Sharing the updated PPT on "Provident Fund & MP Act 1952" of India. Kindly have a look on the Same & Share your valuable feedback & suggestion. If you found any mistake kindly update me for the modification the same.
Regards,
Anshu Shekhar Singh
Mob: 9999 844 355
Dear Seniors & Friends,
Sharing the updated PPT on "Provident Fund & MP Act 1952" of India. Kindly have a look on the Same & Share your valuable feedback & suggestion. If you found any mistake kindly update me for the modification the same.
Regards,
Anshu Shekhar Singh
Mob: 9999 844 355
I came across employees who had many queries about their EPF and lacks basic idea which they should have. Idea about EPF can help investment plans as well.
Dear Seniors & Friends,
Sharing the PPT on "Employee's State Insurance Act 1948" of India. Kindly have a look on the Same & Share your valuable feedback & suggestion. If you found any mistake kindly update me for the modification the same.
Regards,
Anshu Shekhar Singh
M: 9999 844 355
Employee Provident Fund (EPF) Provident fund is a welfare scheme for the benefits of the employees. Under this scheme both the employee & employer contribute their part but whole of the amount is deposited by the employer. Employer deducted the employee share from the salary of the employee. The interest earned on this investment is also credited in pf account of the employees. At the time of retirement, the accumulated amount is given to the employees, if certain conditions are satisfied. Applicability of the Act It is applicable: a) Every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are employed; b) Every other establishment employing 20 or more persons or class of such establishments which the Central Govt. may notify; c) Any other establishment so notified by the Central Government even if employing less than 20 persons. Every employee, including the one employed through a contractor (but excluding an apprentice engaged under the Apprentices Act or under the standing orders of the establishment and casual laborers), who is in receipt of wages up to Rs.6,500 p.m., shall be eligible for becoming a member of the funds. The condition of three months’ continuous service or 60 days of actual work, for membership of the scheme. Tax ability of PF Deduction of PF can be claimed under section 80C while calculating Income Tax & when the employee withdraw the amount of PF & Interest after the retirement then, PF amount & Interest amount is not taxable. Pf can be accumulated withdrawn by the employee if he is unemployed for more than 2 month. 75% PF can be withdrawn after the employment of 1 month & rest 25% PF can be withdrawn after the unemployment of 2 month. It is on the choice of the employee after withdrawn of 75% amount that they should continue with the PF account or want to withdrawal the whole amount.
Computation Under Social Security Laws.pptxYogesh Aher
Employees Provident Fund & Miscellaneous Provisions Act, 1952, Contribution, Breakup of EPF Contribution, Online procedure for opening of PF account and required documents, ESI Act 1948, Contribution, ESI Benefits, Calculations for payment of compensation,
2. CONTENTS
• INTRODUCTION
• SCOPE & EXTENT
• APPLICABILITY / ELIGIBLITY
• INTERESTS
• INVESTMENT PATTERN FOR A PF TRUST
• WITHDRAWL OF PF
• SETTLEMENTS
• EXEMPTION OF TDS ON SETTLEMENT
• FORMS & RETURSN
• BENEFITS
• CONCLUSION
3. INTRODUCTION
Employee Provident Fund (EPF) is one of the main platforms of savings in
India for nearly all people working in Government, Public or Private sector
Organizations. It is implemented by the Employees Provident Fund
Organization(EPFO) of India.
It is a mandatory, tax-qualified, defined,
contribution retiral benefit plan wherein
equal contribution at the specified rate is
made by the employer and the employee and
the same is payable in lump sum on retirement.
5. WHO IS APPLICABLE FOR
EMPLOYEE PROVIDENT FUND
?
• The employee provident fund
act 1952 implies to the whole of
India except the state of Jammu
& kashmir (section 2).This act
implies (section 3) to:
• Every establishment which is a
factory engaged in any industry
specified in schedule I & in
which 20 or more persons
employed;
• Any establishment employing 20
or more persons of such
establishments which central
government may, by notification
in the official gazette specify.
• NGO’S
• Considering the operations of
charitable institutions these
includes the following:
• Educational, scientific research &
training institute ;
• Establishment known as
hospitals;
• Establishment rendering expert
services;
• Establishments engaged in
poultry farming
• Establishment engaged in cattle
feed industry;
6. WHO IS ELIGIBLE FOR
EMPLOYEE PROVIDENT
FUND?• FOR NEW ENTRANTS
• An employee is eligible for membership from
the day he joins the company who has
enrolled for EPF Scheme
• If an Employer has equal to or more than 20
employees, it is mandatory for him or to join
the Employee Provident Fund Scheme.
• 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 statutorily over and
above the prescribed rate.
• FOR EXISTING ENTRANTS
• 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.
7. WHAT IS THE EPF
INTEREST RATE?
The EPF interest rate of India is decided by
the central government with the
consultation of Central Board of trustees. In
the past several decades, the interest rate
has ranged from 8-12 % of the balances
maintained in the fund. The EPF interest
rate notification is available on the official
website of EPF India on an annual basis.
The same is communicated through major
dailies in all cities
8. HOW MUCH ONE
CAN SAVE BY
INVESTING IN EPF?
Let’s say Swayam starts with
a basic salary of Rs. 20,000.
Every year, on an average, he
gets a 5% increment. He
started at 25 years and
worked till 60 years so his
working life is, 35 years. He
contributes 12% of his basic
salary towards PF which is
matched equally by one’s
company, (EPF contribution
is 3.67%, EPS 8.67%). In this
case, over the course of 35
years of his working life,
his total contribution is Rs.
26.01 Lakhs. Of course, his
company makes a
contribution of Rs.
7.955 Lakhs, total
contribution of
Rs 33.967 lakh. And this
amount grows into – Rs. 1.38
Crores at the time of his
retirement.
9. HOW IS IT
CALCULATED ?
At the beginning of each
year there would be
opening balance, the
amount accumulated till
then. Contribution is
made monthly but
interest is calculated
yearly. On gets interest
on opening balance and
monthly contribution. So
for next year the new
opening balance would
be: old opening balance
+
contribution throughout t
he year + interest on the
(old opening balance +
contribution)
10. HOW WOULD I
KNOW THE
AMOUNT OF
ACCUMULATIO
N IN MY PF
ACCOUNT ?
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.
11. CLARIFICATION ABOUT
CONTRIBUTION• AFTER REVISION IN WAGE CELLING FROM Rs.5000
to Rs.6500 w.e.f. 1-6-2001 PER MONTH THE
GOVERNMENT CONTINUE TO CONTRIBUTE
1.16% UPTO THE ACTUAL WAGE OF
MAXIMUM Rs.6500 PER MONTH TOWARDS
EMPLOYEES’ PENSION SCHEME. THE
EMPLOYER’S SHARE IN THE PENSION
SCHEME WILL BE Rs.541 w.e.f. 1-6-2001.
•
• UNDER EMPLOYEES’ DEPOSIT-LINKED
INSURANCE SCHEME THE CONTRIBUTION @
0.50% IS REQUIRED TO BE PAID UPTO A
MAXIMUM LIMIT OF Rs.6500. THE EMPLOYER
WILL PAY ADMINISTRATIVE CHARGE @
0.01% ON MAXIMUM LIMIT OF Rs.6500.
•
• THE EMPLOYER ALSO WILL PAY
ADMINISTRATIVE CHARGES @ 0.01% ON
MAXIMUM LIMIT OF Rs.6500 WHEREAS AN
EXEMPTED ESTABLISHMENT WILL PAY
INSPECTION CHARGES @ 0.005% ON THE
TOTAL WAGES PAID.
• NOTES
• THE ABOVE CLARIFICATION IS GIVEN BY TAKING
WAGES UPTO A MAXIMUM OF Rs.6500 TOWARDS
WAGE (BASIC+DA).
• SINCE AN EXCLUDED EMPLOYEE i.e. DRAWING
WAGES MORE THAN Rs.6500 CAN ALSO BECOME
MEMBER OF THE FUND AND THE SCHEMES ON
JOINT REQUEST AND IF, FOR INSTANCE, SUCH AN
EMPLOYEE IS GETTING Rs.10,000 PER MONTH, HIS
SHARE TOWARDS PROVINDENT
FUNDCONTRIBUTION WILL BE Rs.1200 e.g. 12% AND
EMPLOYER’S SHARE TOWARDS PROVIDENT FUND
CONTRIBUTION WILL BE Rs.659 AND Rs.541
TOWARDS EMPLOYEES’ PENSION FUND.
12. PAYMENT OF
CONTRIBUTION
• THE EMPLOYER SHALL PAY THE
CONTRIBUTION PAYBLE TO THE
EMPLOYEES PROVIDENT FUND,
EMPLOYEES DEPOSITE LINKED
INSURANCE, AND EMPLOYEES
PENSION FUND IN RESPECT OF THE
MEMBER OF THE EMPLOYEES
PENSION FUND BY HIM DIRECTLY
BY OR THROUGH A CONTRACTOR.
• IT SHALL BE THE RESPONSIBILITY
OF THE PRINCIPAL EMPLOYER TO
PAY THE CONTRIBUTIONS PAYBLE
TO THE EPF, EDLI AND EPSBY HIM
SELF IN RESPECT OF THE
EMPLOYEES DIRECTLY EMPLOYED BY
HIM AND ALSO IN RESPECT OF THE
EMPLOYEES EMPLOYED BY OR
THROUGH A CONTRACTOR.
• A/c – 1 EPF EMPLOYERS 12% +
EMPLOYEES 3.67% = 15.67 %
• A/c – 2 EPF ADMIN CHARGES 1.10%
• A/c – 10 EPS EMPLOYEES 8.33 %
• A/c – 21 EDLI 0.50 %
• A/c – 22 EDLI ADMIN CHARGES
0.01%
• TOTAL = 25.61%
13. WITHDRAWL OF EMPLOYEE
PROVIDENT FUND 1952
WITHDRAWL BEFORE
RETIREMENT
• You can withdraw up to 90% of the amount in you
EPF account after you attain the age of 54 years, or
within one year before actual retirement on
superannuation whichever is later. Claim application
in form 19 has to be submitted to the concerned
Provident Fund Office.
• For other cases such as
• Ø Shifting of Jobs
• At such times, the PF balance could be transferred
from one employer to another. The existing balance
would continue to stay. With fresh contributions
made by the new employer.
•
• Ø Quitting of Job
• PF could be withdrawn, if you quit your job and
provide a declaration that you do not intend to work
for the next six month.
WITHDRAWL AFTER
RETIREMENT
• You can withdraw full amount in the
fund on retirement from service after
55 years of age. You can also
withdraw the full amount due to any
of the following occurrences:
•
1. If you have not attained the age
of 55 year at the time of termination
of service.
2. If you retired on account of
permanent and total bodily or mental
disablement
3. If you migrated from India for
permanent settlement abroad or for
taking employment abroad.
4. In the case of mass or individual
retrenchment.
14. SETTLEMENT OF EMPLOYEE
PROVIDENT FUND CLAIM
IMMEDIATE SETTLEMENT WITHOUT WAITING PERIOD
OF TWO MONTH
SETTLEMENT ONLY AFTER A WAITNG PERIOD OF
TWO MONTHS
69(1)(a)Retirement after attaining 58yrs of age. 69(1)(e)(i)Transfer of a non retrenched employee from a closed
establishment to uncovered establishment.
69(1)(b)Retirement on a/c of total & permanent incapacity due
to bodily or mental infirmity.
69(1)(e)(ii)Transfer of an employee from a covered
establishment to an un-covered establishment under the same
employer.
69(1)(d)Termination of service on retrenchment. 69(2)Other cases viz. Resignation, Leaving Service, etc.
69(1)(dd) Termination on V.R.S NOTE: For female members leaving service for the purpose
of getting married; waiting period not applicable.
69(1)(c) Migration from India for permanent settlement
abroad or taking employment abroad.
69(1)(e)(iii)Members discharged & retrenchment
compensation paid under I.D Act 1947.
15. EXEMPTIONS
Head Statutory PF Recognized PF UnRecognised PF
Employers contribution to PF Exempt from tax Exempt up to 12% of salary
(Basic +DA)
Exempt from tax
Deduction under sec 80C Available Available Not available
Interest credited on PF account Exempt from tax Exempt up to 9.5% Exempt from tax
Lump sum payment received at
the time of retirement or
termination of service
Exempt from tax Exempt from tax: Only employees share of
contribution is exempt
a. If the employee has worked for
at least 5 years with the employer
b. If the service is terminated on
account of ill-health or by
contraction or discontinuance of
the employer’s business or any
other reason beyond control of
employee
c. If the employee transfers the
balance in his PF to his new PF
a/c maintained by his new
employer
16. FORMS OF PF
• Form No. 2 --Nomination form
• Form No. 11 –Declaration of previous employer & PF and
Pension amount
• Form No. 13 –PF Transfer from previous employer
17. RETURNS IN EMPLOYEE
PROVIDENT FUND
• MONTHLY RETURNS
• 12 A (Employees Strength and paid)
• Form 5 - New Joining (Name, Father’s Name, DOJ, DOB,
Gender.
• Form 10 – Left Employees (Name, Father’s Name, DOJ, DOL,
Reason.
• COMBINED CHALLAN A/C – 1,2,10,21 & 22
• Note : Above all contribution count on Employees Basic
Earnings.
• Nomination : Form – 2 (Revised)
• Nominee Change : Form – 8
• For Withdrawal : Form 19 (Green) & 10 c (White)
• Loan : Form – 31 after 7 Years
• ANNUAL RETURNS
• 3 A : Employees individual detail month wise (Period 1st April
to 31st March)
• 6 A : All Employees combined detail month wise
18. ADVANCES FROM PF
ACCUMULATION ?
• Purchase dwelling site
• Construction of a dwelling house
•
• Completing construction of the house
• Buy a dwelling house /Flat from Agency
• Purchasing a newly constructed/old dwelling house or flat from an individual
• Purchasing house/flat from a promoter
•
•
• Additional Loan -alterations/improvements
•
•
• Further housing withdrawal
•
• Repayment housing loan
19. NOMINATION
• An employee may be allowed to make a nomination conferring on one or more persons the right
to receive the provident fund amount
• If an employee nominates more than one person, he shall, in his nomination specify the amount or
share payable to each of the nominees.
• Where an employee has a family at the time of making a nomination, the nomination shall be in
favour of one or more persons belonging to his family
• Any nomination made by an employee in favour of a person not belonging to his family shall be
invalid.
• If at the time of making a nomination the employee has no family, the nomination may be in
favour of any person or persons
• A nomination made by an employee may, at any time, be modified by filing Form no. 2
•
• g) Where the nomination is wholly or partly in favour of a minor, the Member may, appoint a major
person of his Family to be the guardian of the minor nominee Provided that where there is no
major person in the Family, the Member may, at his discretion, appoint any other person to be a
guardian of the minor nominee.
• “Family” means: -
• For Provident Fund (PF): -
• in the case of a male member, his wife, his children, whether married or unmarried, his dependent
parents and his deceased son’s widow and children;
• In the case of a female member, her husband, her children, whether married or unmarried, her
dependent parents, her husband’s, dependent parents, her deceased sons’s widow and children;
20. PENALTY IN EMPLOYEE
PROVIDENT FUND ACT 1952
• LESS THAN 2 MONTHS @17% p.a.
• 2 MONTHS & ABOVE BUT LESS THAN UPTO 4 MONTHS @
22% p.a.
• 4 MONTHS & ABOVE BUT LESS THAN UPTO 6 MONTHS @
27% p.a.
• 6 MONTHS & ABOVE @ 37 % p.a.
21. PENAL PROVISION FOR
EMPLOYEE PROVIDENT FUND
• LIABLE TO BE ARRESTED WITHOUT WARRANT BEING A
COGNISABLE OFFENCE.
• DEFAULTS EMPLOYER IN PAYING CONTRIBUTIONS OR
INSPECTION-ADMINISTRATIVE CHARGES ATTRACT
IMPRISONMENT UPTO 3 YEARS AND FINES UPTO Rs.10,000
(Sec.14).
• FOR ANY RETROSPECTIVE APPLICATION, ALL DUES HAVE TO
BE PAID BY EMPLOYER WITH DAMAGES UPTO 100% OF
ARREARS.
22. BENEFITS OF EMPLOYEE
PROVIDENT FUND ?
• EMPLOYEES COVERED ENJOY A BENEFIT OF SOCIAL SECURITY
IN THE FORM OF AN ATTACHABLE AND UNWITHDRAWABLE
(EXCEPT I SEVERLY RESTRICTED CIRCUMSTANCES LIKE
BUYING HOUSE, MARRIAGE, EDUCATION etc.). FINANCIAL
NEST EGG TO WHICH EMPLOYEES AND EMPLOYERS
CONTRIBUTE EQUALLY THROUGHOUT THE COVERED
PERSONS EMPLOYMENT.
• THIS SUM IS PAYBLE NORMALLY ON RETIREMENT OR DEATH.
OTHER BENEFITS INCLUDE EMPLOYEES PENSION SCHEME
AND EMPLOYEES DEPOSITE LINKED INSURANCE SCHEME.
23. CONCLUSIONS
• Contribution made to EPF and PPF gets deduction under
Section 80C and the interest earned is tax free. That is both
works under EEE (Exempt, Exempt and Exempt) tax regime.
However, PF is better than PPF in two aspects -
• In the case of PF, the employer also contributes to the fund.
There is no such contribution in case of PPF.
The rate of interest on PF is also marginally higher (currently
8.50%) than interest on PPF (8%).