Eligibility to be the Member of EPF

Eligibility to be the Member of EPF

Provident Fund

Employees’ Provident Fund is a statutory benefit payable to employees working in India. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 ("Act") is applicable pan-India. The administration and management of Employees’ Provident Fund (EPF) is carried out by the Central Board of Trustees (CBT) established by the Central Government consisting of representatives of the Government, employers and employees respectively. The Employees’ Provident Fund Organization (EPFO) assists this Board in its activities.


Concept of Employees’ Provident Fund

EPF is a welfare scheme brought into force to secure a better future for employees. It is a statutory benefit available to the employees post retirement or when they leave the services. In case of deceased employees, their dependents will be entitled for the benefits. Under the Employees’ Provident Fund Scheme (EPF Scheme) both employers and employees have to make their contributions towards the Fund. Interest earned on the amount is credited to the member’s Provident Fund Account (PF account) and is available to the employee at the time of retirement or exit from employment as the case may be, provided certain conditions are fulfilled.


Applicability

Employees’ Provident Fund has been set up under The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (“Act”) applicable pan-India. The Act is applicable to every factory or industry mentioned in Schedule 1 of the Act, wherein 20 or more persons are employed or to any other establishment which the Central Government specifies by notification in the official Gazette, even when the number of employees is less than 20.


Eligibility to be the member of EPF

Enrollment for PF membership is mandatory for:
  1. Any person employed for wages for any work of an establishment either manual or otherwise.
  2. Any person employed through a contractor or engaged as an apprentice but not being an apprentice under Apprentices Act, 1961.
  3. Any person under the standing orders of an establishment, earning less than or equal to Rs. 15,000 per month other than the excluded and exempted employees under Section 17 of the Act.

Withdrawals from EPF account

  1. The funds from an EPF account can be withdrawn completely in full settlements on attaining 58 years of age or at the time of retirement the employee can claim for a complete settlement or if an employee remains unemployed for a period of 2 months or more or in the case of death while in service before attaining the age of retirement, in which case the nominees or legal heirs are entitled to withdraw the accumulated fund.
  2. The partial withdrawal of funds from the EPF is available for educational opportunity, medical treatment, repayment of home loan, marriage, purchase of land/house/flat, in case the establishment/factory is closed, natural calamity, an year before retirement and unemployment for a period of more than one month.


Benefits

The employees covered under the various schemes of the Act are entitled for the following benefits
  1. Employees can take advances or make withdrawals*.
  2. PF amount of a deceased member is payable to the nominees or legal heirs.
  3. The employer not only contributes towards the PF but also makes the necessary contributions towards the employee’s pension which can be used by the employee post-retirement
  4. Under the EDLI Scheme employees are properly insured in order to avail the lump sum benefit at the time of death while in service.
  5. EEE (Exempt, Exempt, Exempt) tax benefit under the Income Tax Act enables tax-free returns for the employees.
  6. Employees receive special benefits in the form of added income to their savings in the form of interest.
  7. PF account can be transferrable if any member changes employment from one establishment to another where such Provident Fund scheme is applicable.

Compliance Checklist under the EPF Act


S.No.ProvisionsCompliance
1Employer and Employee’s PF dues15th of the following month
2Payment of Pension Fund15th of the following month
3Payment of Insurance Fund15th of the following month
4Detail of employeesDetail of employees enrolled as members PF fund, within 1 month of coverage in the prescribed form

5

Nomination FormImmediately on Joining the fund in the prescribed form

6

Addition of membersDetail of newly enrolled members within 15 Days of the following month in the prescribed form

7

Deletion of memberDetail of members left service during the monthbefore21st of the following month in the prescribed form

8

Details of contributionDetail of employees and employer’s contribution by 25th of the following month in the prescribed form

9

Detail of wages and contributionFor each member details shall be given By 30th April every year

10

Yearly Consolidated statement of contributionTo be forwarded yearly along with Form 3A

11

Return of ownership of the establishmentWithin 15 days on coverage and whenever there is a change in ownership
12Transfer of PFForm 13 needs to file


In addition to above Compliance related Insurance and pension also need to duly comply with.





For more info visit TAXAJ
Posted by Ramesh Kumar Gupta

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