PF Return filing

Provident fund is regulated by the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act). The Act was enacted with the main objective of making some provisions for the future of industrial workers after their retirement and for their dependents in case of death. It provides insurance to workers and their dependents against risks of old age, retirement, retrenchment or death of the workers. Provident fund is a social security fund that was introduced for the purpose of encouraging savings among employees, so as to benefit them during the course of their retirement. It is a self financed fund with following terms.

• The contributions payable by the employer under the Scheme shall be at 12% of the [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any)] payable to each employee to whom the Scheme applies;

• The contribution payable by the employee under the Scheme, shall be equal to the contribution payable by the employer in respect of such employee;

• Provided that in respect of any employee to whom the Scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding [ten per cent] or [twelve per cent], as the case may be, of his basic wages, dearness allowance and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act;

• The contributions shall be calculated on the basis of [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any)] actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis;

• Each contribution shall be calculated to [the nearest rupee, 50 paise or more to be counted as the next higher rupee and fraction of a rupee less than 50 paise to be ignored;

• The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer’s contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in this Scheme referred to as the member’s contribution);

• In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member’s contribution) and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution (in this Scheme referred to as the employer’s contribution) and also administrative charges.

• Administrative Charge currently is 1% (around) which is exclusively payable by the employer.

• It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.

• It shall be responsibility of the employer to file return and deposit contribution on or before 15th of the month succeeding of wages month.

Where an employer makes default in the payment of any contribution to the fund, or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 of the Act or in the payment of any charges payable under any other provisions of the Act or Scheme or under any of the conditions specified under section 17 of the Act, the Central Provident Fund Commissioner or such officer as may be authorised by the Central Government by notification in the Official Gazette, in this behalf, may recover from the employer by way of penalty, damages at the rates given below:

S.No. Period of Default Rates of Damages(percentage of arrears per annum)
(a) Less than two months Five
(b) Two months and above but less than four months Ten
(c) Four months and above but less than six months Fifteen
(d) Six months and above Twenty-five

The Act aims to provide for institution of provident funds, family pension funds and deposit linked insurance funds for the employees in the factories and other establishments. Accordingly, three schemes are in operation under the Act. These schemes taken together provide to the employees an old age and survivorship benefits, a long term protection and security to the employee and after his death to his family members, and timely advances including advances during sickness and for the purchase/ construction of a dwelling house during the period of membership. These three schemes are as follows:-

• Employees' Provident Fund Scheme, 1952

• Employees' Deposit Linked Insurance Scheme, 1976

• Employees' Pension Scheme, 1995(replacing the Employees' Family Pension Scheme, 1971)