Employees Provident Fund FAQ

Employee Provident Fund (EPF) is the scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The scheme is managed by the Employees Provident Fund Organization (EPFO). It is basically the retirement benefit scheme where both employer and the employee give a contribution in equal proportion and deposit the same in the EPF account of the member vide monthly return filling.

1. What is the purpose and essence of the EPF?

The purpose of PF fund is to help employees to save part of their salary every month so that he can use the deposited amount in an event that the employee is unable to continue or unfit to work or at the time of retirement.

The essence of the Employee Provident Fund is that it is a very essential tool for retirement planning. Certain benefits are available under EPF which most of us are unaware of.

2. Which schemes are involved in EPF acts and the purpose of these schemes?
   
   EPF (Employees Provident Fund), EPS (Employees’ Pension Scheme), EDLI (Employees Deposit Linked Insurance Scheme). The money which we deposit goes into these three schemes in different percentages

EPS: EPF is a retirement benefits scheme and helps salaried employees save a good amount of money for their post-retirement life.

EDLI: All employees who are covered in the Employees' Provident Fund are by default covered by the Employee's Deposit Linked Insurance Scheme, 1976 (EDLI). EDLI serves an amount to the insured's beneficiary person in the event of death due to natural causes, illness or accident.

3. How to obtain the EPF registration certificate?

For the newly incorporated companies the registration can be obtained through SPICe+ and the portal of Shram Suvidha is closed for newly incorporated companies on or after 18th February 2020. For entities (i.e. LLP, Proprietorship firm; Partnership firm whether registered or unregistered firm) other than newly incorporated companies, the registration will be through Shram Suvidha portal.

4. When to mandatorily obtain PF registration?

             Every establishment having 20 or more employees has to mandatorily obtain the EPF registration.

5. Which category of employees are mandatorily covered in the EPF deduction?

The employees having the basic salary of Rs. 15000/- or below as basic wages will be mandatorily covered for the deduction and whose basic wages are above Rs. 15000/- then the option is on the employee and the employer whereas the PF will be considered on only 15000/. Further, it might be possible that the same will increase also in the future

6. What are the PF wages?

As per the latest regulations of the EPFO, the EPF is deducted on complete gross salary of the employee. Earlier the deduction was not on the complete salary, the same was deducted on the sum of Basic wages and Dearness Allowance (DA).

7. What are the sources of contribution and the percentage of deduction?

The EPF contribution is the total of half part contribution of the employee and half contribution of an employer as per certain percentages. The EPF contribution percentage is 12% of the gross wages of the employee’s salary.

8. Anything that we need to submit after getting registration? If yes any time limit specified by the department for the submission?

Yes, after getting the registration under EPF Act we need to file monthly returns with the department.  The last date to file the EPF return is the 15th day of every following month.

Example: For March 2020 month the due date to file the EPF return is 15th of May, 2020.

9. What is the pre-requisite to file EPF returns?

The EPF returns are UAN based i.e. the employer is required to first register the employees in the EPFO at employer portal for the generation of UAN or the member id wherein we will feed the details of the employees. 

10. What is UAN?

Unified Account Number (UAN) is the 12 digit number which is allotted to an employee whose PF is deducted. The purpose of the UAN is used to manage the EPF account.

11. What are the details required for UAN or member Id generation?

For the generation of the UAN, the details required are DOJ, DOB, Adhar Card, Father Name, Bank Details, PAN card, Mobile No and Mail Id. If UAN already generated by the previous employer then that UAN also because of One member- One UAN or EPF Account.

12. If there is no employee and the registration has been taken, then any other specific compliance?

If the company has taken the registration and at any point of time there is no employee in the company whose PF is deducted, then also the company has to file NIL return via submitting the administration and inspection charges.

13. What are the Consequences of late EPF return filling?

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

Delay of 0 to 2 months– @ 5 % p.a.

Delay of 2 to 4 months – @10 % p.a.

Delay of 4 to 6 months– @ 15 % p.a.

Delay more than 6 months – @ 25 % p.a. (subject to a maximum of 100%)

14. What are the consequences of the non-filling of EPF return?

If the returns are not filled for the continuous period right from taking the registration then the department can issue the notice or summon to the concerned employer for non-compliance and even the proceeding of inspection under Section 7A of the Employee Provident Fund Act will commence upon the employer.

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