Provident Fund Registration


WHAT IS EMPLOYEES PROVIDENT FUND?

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is enacted to provide a kind of social security to the industrial workers. The security, however, differs from the security provided to them under the Workmen's Compensation Act or the Employee's State Insurance Act. The Employees' Provident Funds and Miscellaneous Provisions Act mainly provides retirement or old age benefits, such as Provident Fund, SuperannuationPension, Invalidation Pension, Family Pension and Deposit Linked Insurance.
Provision for terminal benefit of restricted nature was made in the Industrial Disputes Act, 1947, in the form of payment of retrenchment compensation. But this benefit is not available to a worker on retirement, on reaching the age of super annuation or voluntary retirement.
The Employees' Provident Funds and Miscellaneous Provisions Act is intended to provide wider terminal benefits to the industrial workers. For example, the Act provides for payment of terminal on reaching the age of superannuation, voluntary retirement and retirement due to incapacity to work.


TO WHOM IS EMPLOYEES PROVIDENT FUND APPLICABLE?

Establishment which is factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed. Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf. Any establishment employing even less than 20 persons can be covered voluntarily under section 1(4) of the Act.


WHO IS ELIGIBLE FOR EMPLOYEES PROVIDENT FUND?

Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.


PAYMENT OF CONTRIBUTION?

The employer shall pay the contribution payable to the EPF, EDLI and Employees' Pension Fund in respect of the member of the Employees' Pension Fund employed by him directly by or through a contractor. It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, EDLI and Employees' Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.


WHAT IS THE BENEFIT OF EMPLOYER PROVIDENT FUND?

Employees covered enjoy a benefit of Social Security in the form of an unattachable and unwithdrawable (except in severely restricted circumstances like buying house, marriage/education, etc.) financial nest egg to which employees and employers contribute equally throughout the coverered persons employment. This sum is payable normally on retirement or death. Other Benefits include Employees Pension Scheme and Employees Deposit Linked Insurance Scheme.


CLARIFICATION ABOUT CONTRIBUTION?

After revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per month, the government will continue to contribute 1.16% upto the actual wage of maximum Rs.6500 per month towards Employees Pension Scheme. The employers 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 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.


RATES OF CONTRIBUTION?

EMPLOYEES CONTRIBUTION - 12% of basic + DA subject to maximum of Rs. 6500/- towards provident fund scheme, nil towards insurance scheme, nil towards pension fund scheme.
EMPLOYER CONTRIBUTION - 12% of basic + DA subject to maximum of Rs. 6500/-, out of which 8.33% is segregrated and credited to the Employees Pension Fund in Account No. 10, 0.5% towards insurance scheme. The employer is also required to pay administrative charges at the rate of 1.10 percent of the pay payable to the employees in respect of which provident fund contributions are payable
CENTRAL GOVERNMENT CONTRIBUTION - 1.16% towards Employees Pension Fund.


WHAT ARE THE BENEFITS PROVIDED UNDER THE SCHEME?

The following three kinds of benefits are provided under the scheme:
(1) Withdrawal benefit, (2) Benefit of non-refundable advances, (3) Benefit of financing of Life Insurance Policies.

1.Withdrawal Benefit
(a) A member can withdraw the full amount standing to his credit in the Fund in the following circumstances immediately
[1] Retirement after attaining the age of 58 years,
[2] retirement due to incapacity for work,
[3] migration for permanent settlement abroad,
[4] mass retrenchment,
[5] voluntary retirement,
[6] closer of establishment,
[7] transfer to an establishment not covered under the Act,
[8] discharge with payment of retrenchment compensation, etc {Para 69}

(b) In all the order cases of leaving services he can withdraw the full amount if he remains unemployed after the waiting period of two months unemployment.

2.Benefit of Non-refundable Advances: Non-refundable advances from the amount standing to the credit of a member in the Fund can be sanctioned for the following purposes:
a. purchase of a house,
b. repayment of a loan, for housing,
c. unemployment due to lock-out or temporary closure,
d. unemployment due to illness,
e. marriage of a self of of daughter, son, sister or brother,
f. education of son or daughter,
g. exceptional calamity, etc.
h. withdrawal for investment in Varishta Pension Bima Yojana.

3. Benefit of financing of Life Insurance Policies: This benefit can be available as specified in Paragraphs 62 to 67.


WHAT IS OUR ROLE

We help in obtaining the Employee Provident Fund Registration as well as in calculation and payment of the same along with filing statutory returns in specified times.


CLIENTELE

Our clients include several global multinationals, SMEs, university spin-out companies and investment companies.