SCOPE OF THE ACT
• Employee’s provident fund covers under Employees Provident Fund & Miscellaneous Provisions Act, 1952.
• Not applicable on Jammu & Kashmir state.
• It is a scheme for the benefits of the employees. Under this, both the employee & employer contribute their part.
• Employee share will be deducted by the employer from the salary of the employee.
• The interest earned on this investment is also credited in Provident Fund A/C of the employees.
• At the time of retirement of employee, contributed amount and interest on such amount is given to the employees, if certain conditions are satisfied.
APPLICABILITY OF THE ACT
• Any factory which is engaged in any industry which are specified in Schedule 1 in which 20 or more people are employed;
• Any other establishment who is employing 20 or more persons this act will be applicable.
• Any other establishment as notified by the state or central Government will be covered under this act even if employ less than 20 people.
PF CONTRIBUTION RATE
• Equal contribution shall be paid by both employer & employee.
• Provident Fund Contribution paid by employer & employee is 12% of salary*.
*salary=basic pay + dearness allowance + retaining allowance
• Provident Fund Contribution rate will be 10%, in which establishments where the employees are less than 20.
• It is not mandatory to deduct PF if salary is more than 15000. But in case Salary is less than or equals to 15000 then, PF deduction is mandatory and after increment, it is also mandatory.
• 3.67% out of 12% from the employer’s contribution shall goes towards the EPF Account while the balance 8.33% from your employer’s side is diverted to your Employee’s Pension Scheme.
As per union budget 2018, the EPF contribution rate for the newly recruited female employees has been reduced from 12% to 8%. All this benefits will be available to the new female employees for the first three years of employment.
BREAKUP OF EPF CONTRIBUTION
• Employee Provident Fund = 3.67%
• Employee's Pension Scheme = 8.33%
• EDLI Employee Deposit Linked Insurance will be equal to 0.5% (Capped with a maximum of Rs. 15,000/-)
• EPF Administrative charges = 0.85%
• PF Admin Account = 1.1%
• EDLIS Administrative Charges = 0.01%
INTEREST AND PENAL DAMAGES
A. Penal Interest under section 7Q:
No. of days delayed in making payment x 12% Per annum
B. Penal Damages under section 14B:
• For delay in payment -Less than 2 months:
No. of days delayed in making payment x 5% Per annum
• For delay in payment-2 months and above but less than 4 months
No. of days delayed in making payment x 10% Per annum
• For delay in payment-4 months and above but less than 6 months
No. of days delayed in making payment x 15% Per annum
• For delay in payment-6 months and above
No. of days delayed in making payment x 25% Per annum
WITHDRAWAL OF PF BALANCE
• After attaining the 58 years of age, employee will be eligible for the withdrawal of amount of provident fund.
• The total PF balance includes both the employee's & employer’s contribution along with the accrued interest on the contributed amount.
• It also gets the Employees' Pension Scheme (EPS) amount which depends upon the years of service of the employee.