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EPF.ppt
- 1. THE EMPLOYEE'S PROFIDENT FUNDACT, 1952 1 By Suraj kumar Pal Presented to : Dr Sushil kumar
- 2. INTRODUCTION Salary consistsof 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 Employee’s Provident Fund Act 1952 2
- 3. THE EMPLOYEE’S PROVIDENTFUND 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) Every industry employing 10 or more persons which the Central Govt. may notify Any other establishment notified by the Central Government even if employing less than 10 persons 3
- 4. THE EMPLOYEE’S PROVIDENTFUND ACT 1952 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 4
- 5. THE EMPLOYEE’S PROVIDENTFUND ACT 1952 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 1.10% Administration charges on total wages are payable by the employer 0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages and payable by the employer towards EDLI fund 0.01% EDLI Administration charges calculated on total EDLI slab wages are payable by the employer 5
- 6. THE EMPLOYEE’S PROVIDENTFUND ACT 1952 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 @ 8.5% PF A/c can be transferred if any member changes from one establishment to other where the PF Scheme is applicable 6
- 7. THE EMPLOYEE’S PROVIDENTFUND ACT 1952 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 7
- 8. THE EMPLOYEE’S PROVIDENTFUND ACT 1952 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 8
- 9. THE EMPLOYEE’S PROVIDENTFUND ACT 1952 Advances / Withdrawals Purchase of site for construction of House / purchase of flat Additions / alterations / improvements to the house Repayment of loan Hospitalisation 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 9
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