EMPLOYEES’ PROVIDENT
FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
Provident Fund scheme was started by few concerns even
before the enactment of the act. The government in 1952 framed this act for the
benefit and welfare of the employees. This act is applicable to employees
drawing pay not more than Rs. 6,500 pm but at the time of registration the same
employee pay should not exceed Rs. 5,000. This act deals with:
- The Employees’ Provident Fund Schemes, 1952,
- The Employees’ Pension Scheme, 1995, and
- The Employees’ Deposit linked Insurance Scheme, 1976
Applicability:
a. To every establishment which is a factory
engaged in any industry specified in Schedule 1 and in which 20 or more persons
are employed, and
b. To any other establishment employing 20 or more
persons or class of such establishments which the Central Government by
notification on the official gazette specify in this behalf.
Non-Applicability:
a.
Establishment registered under the Co-operative
Societies Act, 1912 or under any other law for the time being in state relating
to cooperative societies, employing less than 50 person without the aid of
power,
b.
Establishment belonging to Central or State
Government whose employees are entitled
to the benefit of these provident and pension funds in accordance with
any scheme or rule framed by Central or State Government governing such
benefits,
c.
Establishment belonging to Provincial or State
Act whose employees are entitled to the
benefit of these provident and pension funds in accordance with any act
governing such benefits,
If
once such establishment falls within this act, then the act will apply to such
establishment even if the number of employee falls below 20.
Employees Provident Fund Scheme:
This
act has been passed by Central Government. This fund is administered by Central
Board which is administered by Board of Trustees.
Employee entitled and required to join Provident Fund:
Every Employee of the
establishment earning salary or wages upto Rs. 6,500, except:
1.
An employee who having been a member withdraws
full amount of his accumulations in the fund,
2.
An employee whose pay at the time be is
otherwise entitled to become a member of the fund exceeds Rs. 5,000 pm
3.
An apprentice
Where wages or salary consists of
Basic Salary or Wages, Dearness Allowances, Cash value of food concessions and
retaining allowances.
Contribution:
A.
Employee: 12% of wages though more can be
contributed, even upto 100% of wages though employer is not bound by this.
B.
Employer: 12% of wages, where 3.67% goes to
provident fund and other 8.33% to pension fund.
Due
Date:
Employer is required to pay amount received
from employee on or before 15th of the following month, i.e.
contribution of Oct before 15th November.
Procedure
of Application:
Provident fund form is to be filled up
along with incorporation documents, MOA, AOA, PAN, Address Proof; etc as before
30 days from the date such act becomes applicable on the establishment.
Withdrawal:
Funds can be withdrawn by filling up Form
19. A employee can withdraw the amount only if he/she don’t get into employment
for the 2 month’s period. This requirement of 2 months is not applicable if
girl withdraws such amount for her marriage.
Advance:
Advance can be taken on this account for
marriages (self, siblings, children, etc), buying a house, major surgical
operations, repayment of loans, etc in certain cases, etc which is non
refundable in nature.
Transfer:
Provident fund can be transferred in case
person goes for another job at another place after filling up relevant Form.
Online
Provident Fund facility:
Now online facility of EPF is available.
One can see the members detail, correct the information present. DSC of the
authorized person is required for online submission of claims. Here,
a.
User name and password is required,
b.
The form here is ‘Transfer Claim Form’, instead
of Form 13,
c.
Form can be presented to present or previous
employer for scrutiny,
d.
Physical filing is also permissible.
Employees’ Pension Scheme:
Government
has introduced this scheme under section 6A, to claim this:
Minimum 10 years contributory
service is required, and
a.
Have attained 58 years of age, or
b.
Retirement, or
c.
Permanent total disablement, or
d.
Children pension, or
e.
Orphan pension.
The amount of monthly pension will vary from member to
member. The formula is:
Members Pension =
Pensionable Salary*(Pensionable Service + 2)/70
If the contributory service is less than 20 years but more
than 10 years, monthly pension required is to be determined as if the member
has rendered eligible service of 20 years. The amount so arrived shall be
reduced at the rate of 3% for every year by every service by which the eligible
service falls short of 20 years, subject to maximum reduction of 25%.
Employees’ Deposit Linked Insurance
Scheme:
The
act was framed in 1976. This act came into force from 1st August,
1976.
a.
Applicability: All members of Provident Fund
Scheme
b.
Contributions: 1% of total emoluments i.e. basic
wages, dearness allowances including cash value of food concessions and
retaining allowances.
c.
Administrative Expenses: Employers are required
to pay charges to the insurance fund at the rate of 0.01% of the pay of the
employee members for meeting various expenses subject to a minimum of Rs.
2/month
d.
Nomination: Members nominated in EPF is also
nominated for such fund.
e.
Payment of assurance benefit: In case of death
of Employee, an amount equal to average balance in the account of the deceased
during the preceding 12 months or period of membership, whichever is less shall
be paid to the person eligible.
f.
Exemption from the scheme: If a establishment
has a scheme providing greater benefits than this scheme is exempted from this
scheme.
Statutory protection is provided to the amount of
contribution to provident fund under section 10 from attachment to any Court
decree. The act authorizes the appropriate Government to grant exemptions to
certain establishments or persons from the operation of all or any of the
provisions of the scheme.
Author:
Sagar Gupta
Contact Number: 09918437886
Email: casgrgupta@gmail.com
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