The Employees Provident Funds &

Miscellaneous Provisions Act, 1952

1

INTRODUCTION

Objective:To provide retirement benefit to the employees in the form of lump sum amount and also provide for a pension scheme to the employee & his family. This Act is now applicable to employees drawing monthly pay not exceeding Rs.6,500/-. Presently the following three Schemes are in operation under the Act:-1. The Employees’ Provident Fund Scheme, 19522. Employees’ Pension Scheme, 1995 and3. Employees’ Deposit Linked Insurance Scheme,

1976.2

APPLICABILITY OF THE ACT

All establishments / factories included in the list of notified industries and class of establishments as in Schedule I and employing 20 or more persons.

Any other establishment employing 20 or more persons or class of establishments which the Central Government may notify.

The Act will come into force in an establishment from the very date of set up or commencement of business except certain class of establishments as excluded under Section 16 of the Act.

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APPLICABILITY OF THE ACT It extends to the whole of India except the State of

Jammu and Kashmir.Subject to the provisions contained in section 16, it

applies-(a) to every establishment which is a factory engaged

in anyindustry specified in Schedule I and in which 6[twenty]

or morepersons are employed, and(b) to any other establishment employing 7[twenty] or

more personsor class of such establishments which the Central

Governmentmay, by notification in the Official Gazette, specify in

this behalf:

• Provided that the Central Government may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than 8[twenty] as may be specified in the notification.

(Cont..) APPLICABILITY

• S.1(4): Notwithstanding anything contained in sub-section (3) of this section or sub-section (1) of the section 16 where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment.

NON-APPLICABILITY OF THE ACT

• Any establishment registered under Cooperative Societies Act or State Law relating to Cooperative societies, employing less than 50 persons and working without paid of power.

• To any establishment belonging to or under Control of Central Government or State Government

• To any establishment set up under any Central or State Act• Any other establishment newly set up until the expiry of 3

years • An employee who, having been a member of the fund, has

withdrawn the full amount of his contribution in the fund (a) on retirement from service after attaining the age of 55 years or (b) before migration from India for permanent settlement abroad; or for taking employment abroad

(Cont...) NON-APPLICABILITY

• An employee who, having been a member of the fund, has withdrawn the full amount of his contribution in the fund

(a) on retirement from service after attaining the age of 55 years or

(b) before migration from India for permanent settlement abroad; or for taking employment abroad

• An employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 6,500/- per month.

• A person who, is an apprentice, or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government.

Definitions

Appropriate Government: The Appropriate Government is the Central

Government in relation to- in relation to an establishment belonging to, or

under the control of, the Central Government or in relation to an establishment connected with a railway company, a major port, a mine or an oil field or a controlled industry, 2[or in relation to an establishment having departments or branches in more than one State,] the Central Government; and

in relation to any other establishment, the Appropriate Government is the State Government.

DefinitionsBasic Wages:• “Basic Wages” means all emoluments which are

earned by an employee while on duty or 4[on leave or on holidays with wages

• In either case] in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include--

(i) the cash value of any food concession;(ii) any dearness allowance (that is to say, all cash

payments by whatever named called paid to an employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;

(iii) any presents made by the employer

DefinitionsEmployer:“Employer” means-(i) in relation to an establishment which is a factory, the

owner or the occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948), the person so named.

(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent; then such manager, managing director or managing agent.

Definitions

Employee:“Employee” means any person who is employed for

wages in any kind of work, manual or otherwise, in or in connection with the work of 1[an establishment], and who gets, his wages directly or indirectly from the employer, 2[and includes any person]-

(i) employed by or through a contractor in or in connection with the work of the establishment;

(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961) or under the standing orders of the establishment.

Definitions

(Cont..)“Exempted Employee” means an employee to whom a

Scheme 4[or the Insurance Scheme, as the case may be,] would, but for the exemption granted under section 17, have applied;

“Exempted Establishment” means an establishment in respect of which an exemption has been granted under section 17 from the operation of all or any of the provisions of any Scheme [or the Insurance Scheme, as the case may be], whether such exemption has been granted to the establishment as such or to any person or class of persons employed therein.

Definitions

Factory:“Factory” means any premises, including the

precincts(boundaries) thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power.

Industry:“Industry” means any industry specified in Schedule

I, and includes any other industry added to the Schedule by notification under section4.

Schemes Under the Act

The Employees Provident Fund

Scheme

The Employees’ Pension Scheme

The Employees Deposit Linked

Insurance Scheme

Employees' Provident Fund Scheme S.5

The Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees' Provident Fund Scheme for the establishment of provident funds under this Act for employees or for any class of employees and specify the establishments or class of establishments to which the said scheme shall apply and there shall be established, as soon as may be after the framing of the scheme, a fund in accordance with the provisions of this Act and the Scheme.

• The fund shall vest in, and be administered by, the Central Board constituted under Section 5-A.

• Subject to the provisions of this Act, a Scheme framed under subsection(1) may provide for all or any of the matters specified in Schedule-II.

• A scheme framed under sub-section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme.

FEATURES OF THE SCHEME

QUANTUM OF CONTRIBUTIONThe employer’s and employee’s contribution is 12% each. The employer’s contribution to the Provident

Fund will be 10%/12% of the Pay ( i . e Basic Wages +D . A + Retaining Allowance)

The Central Government is empowered to increase the rate of contribution to 12% by way of notification in the official Gazette.

Employee earning more than Rs.6,500 per month is eligible for availing this scheme.

Contribution under EPF Scheme,1952

1. Employees : 12% on Basic + DA

2. Employer : (a) 3.67% on Basic + DA (b) Administrative Charges : 1.10% on Basic +DA

11 Apr 2023

DIVERSION TO PENSION SCHEME: Out of employer’s contribution of 12% the employer’s contribution of 8.33% will be diverted to Employees Pension Scheme.  The balance will be retained in the EPF Scheme .Thus, on retirement, the employee will get his full share plus the balance of employer’s share retained to his credit in EPF account.INVESTMENT The amount received by way of Provident Fund Contributions is to be invested by the Board of Trustees in accordance with the investment pattern approved by the Government of India. The members get interest on the money standing to the credit at a rate recommended by the Board of Trustees approved by the Government of India

Central Board S.5AThe Central Government may, by notification in the

Official Gazette, constitute with effect from such date as may be specified therein, a Board of Trustees for the territories to which this Act extends (hereinafter in this Act referred to as the Central Board) consisting of the following 8[persons, as members], namely:

(a) a Chairman and a Vice-Chairman] to be appointed by the Central Government; the Central Provident Fund Commissioner, Ex-officio;]

(b) not more than 15 persons appointed by the Central Government from amongst its officials;

(c) not more than 15 persons representing Governments of such States as the Central Government may specify in this behalf appointed by the Central Government;

(Cont..) Central Board S.5A

(d)Ten persons representing employers of the establishment to which the Scheme applies, appointed by the Central Government after consultation with such organizations of employers as may be recognized by the Central Government in this behalf; and

(e)Ten persons representing employees in the establishments to which the Scheme applies, appointed by the Central Government after consultation with such organizations of employees as may be recognized by the Central Government in this behalf.

(2) The terms and conditions subject to which a member of the Central Board may be appointed and the time, place and procedure of the meetings of the Central Board shall be such as may be provided for in the Scheme.

(Cont..) Central Board S.5A

(3) The Central Board shall 1[, subject to the provisions of Section 6-A and Section 6-C administer the fund vested in it in such manner as may be specified in the Scheme.

(4) The Central Board shall perform such other functions as it may be required to perform by or under any provisions of the Scheme ,the Pension Scheme and the Insurance Scheme.

(5) The Central Board shall maintain proper accounts of its income and expenditure in such form and in such manner as the Central Government may, after consultation with the Comptroller and Auditor-General of India, specify in the Scheme.

(6) The accounts of the Central Board shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Central Board to the Comptroller and Auditor-General of India.

(Cont..) Central Board S.5A(7) The Comptroller and Auditor-General of India and any

person appointed by him in connection with the audit of the accounts of the Central Board shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has, in connection with the audit of Government Accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers, documents and papers and inspect any of the offices of the Central Board.

(8) The accounts of the Central Board as certified by the Comptroller and m Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded to the Central Board which shall forward the same to the Central Government along with its comments on the report of the Comptroller and Auditor-General.

(9) It shall be the duty of the Central Board to submit also to the Central Government an annual report of its work and activities and the Central Government shall cause a copy of the annual report, the audited accounts together with the report of the Comptroller and Auditor-General of India and the comments of the Central Board thereon to be laid before each House of Parliament].

Executive Committee S.5AA

(1) The Central Government may, by notification in the Official Gazette, constitute, with effect from such date as may be specified therein, an Executive Committee to assist the Central Board in the performance of its functions.

(2) The Executive Committee shall consist of the following persons as members, namely:-– a Chairman appointed by the Central Government

from amongst the members of the Central Board;– two persons appointed by the Central

Government from amongst the persons referred to in clause (b) of sub-section (1) of Section5A

– three persons appointed by the Central Government from amongst the persons referred to in clause (c) of sub-section (1) of Section 5-A;

(Cont..) Executive Committee S.5AA

– three persons representing the employers elected by the Central board from amongst the persons referred to in clause (d) of subsection(1) of Section 5-A;

– three persons representing the employees elected by the Central Board from amongst the persons referred to in clause (e) of Subsection (1) of Section 5-A;

– the Central Provident Fund Commissioner, ex-officio.

(3) The terms and conditions subject to which a member of the Central Board may be appointed or elected to the Executive Committee and the time, place and procedure of the meetings of the Executive Committee shall be such as may be provided for in the Scheme.

S.7A. Determination of moneys due from Employers

(1) The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner may, by order,

(a) in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and

(b) determine the amount due from any employer under a provision of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.

(2) The officer conducting the inquiry under sub-section 1 shall, for the purposes of such inquiry have the same powers as are vested in a court under the code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the following matters, namely:-

(a) enforcing the attendance of any person or examining him on oath:

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavit; (d) issuing commissions for the examination of

witnesses, and any such inquiry shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196 of the Indian Penal Code 45 of 1960.

(3) No order shall be made under sub-section 1, unless the employer concerned is given a reasonable opportunity of representing his case.

Order Against the Employer• Where an order under sub-section 1 is passed against an

employer ex-parte, he may, within three months from the date of communication of such order, apply to the officer for setting aside such order and if he satisfies the officer that the show cause notice was not duly served or that he was prevented by any sufficient cause from appearing when the inquiry was held, the officer shall make an order setting aside his earlier order and shall appoint a date for proceeding with the inquiry:

• Provided that no such order shall be set aside merely on the ground that there has been an irregularity in the service of the show cause notice if the officer is satisfied that the employer had notice of the date of hearing and had sufficient time to appear before the officer.

Explanation.- Where an appeal has been preferred under this Act against an order passed ex parte and such appeal has been disposed of otherwise than on the ground that the appellant has withdrawn the appeal, no application shall lie under this sub-section for setting aside the ex parte order.

• No order passed under this section shall be set aside on any application under sub-section 4 unless notice thereof has been served on the opposite party.

Employees’ Pension Scheme S.6A

Purpose: The purpose of the scheme is to provide pension

and life assurance to employees of any establishment to which this act applies.

(1) superannuation pension, retiring pension or permanent total disablement pension to employees covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, and

(2) widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of such employees.

Quantum of Contribution to the Pension Fund

Such sums from the Employer’s contribution to EPF Scheme as may be specified in the Pension Scheme. However the sum shall not exceed 8.33% of the Pay (Basic Wages+ D. A +Retaining Allowance), balance-3.67% as the case may be, will be credited in employee’s name in Provident Fund account.

Monthly Pension=Pensionable Salary*(Pensionable Service+2)/70. For e.g. Pensionable service=33 years, pensionable salary= Rs. 5,000, Monthly pension = 5,000*{33+2}/70= Rs. 2,500.

Contribution

1. Employee: Not required

2. Employer :

(a) 8.33% on Basic + DA

It is to be noted that where the pay of the member exceeds Rs. 6,500/- per month, the contribution payable by the employer will be limited to the amt. payable on his pay of Rs. 6,500/- only.

Employees Deposit Linked Insurance Scheme, 1976

Purpose: To provide Life insurance benefits to the employees of the establishment to whom the Act applies. After the Insurance Scheme has been framed , the Central Government Shall establish a deposit Linked Insurance scheme by way of notification in the Official gazette.Contribution: Employees :

Not required..

Employer :(a) 0.50% on Basic + DA(b) Administrative Charges : 0.01% on Basic +DA and retaining allowance(if any)Where the monthly pay of an employee is more than Rs.6,500 the contribution payable in respect of him by the employer is limited to the amounts payable on a monthly pay of Rs. 6,500/-

The Employees’ Deposit-Linked Insurance Scheme, 1976 S.6C

Purpose : To provide life insurance benefits to the employees of the

establishments covered by the EPF & MP Act, 1952

Contribution under EDLI Scheme,19761. Employees : Not required2. Employer : (a) 0.5% on Basic + DA (b) Administrative Charges : 0.01% on Basic +DA Where the monthly pay of an employee is more than Rs.

6,500 the contribution payable in respect of him by the employer is limited to the amts payable on a monthly pay of Rs. 6,500 only.

Benefits of EDLI schemeThe benefit provided under the scheme in the

nature of life insurance as follows:1. On the death of an employment while in

service a lump sum insurance amount is payable to his nominee or family members.

2. The insurance amount is equal to the average balance in the account of the deceased employee in the Provident Fund during a period of 12 months immediately preceding his death. In case the average balance exceeds Rs.35,000/- the insurance amount payable is Rs. 35,000/- plus 25% of the amount in excess of Rs. 35,000/- subject to a ceiling of Rs. 60,000/-.

FUNDING OF THE SCHEMESchemes Employer’s Employees’* Central Govt. Total

Provident Fund 3.67% 12% 0% 15.67%

Insurance Fund (EDLI)

0.5% 0% 0% 0.5%

Pension Fund 8.33% 0% 1.16% 9.49%

Total 12.5% 12% 1.16% 25.66%

* Rate of contribution is 10% in respect of following establishments :-less than 20 persons are employed.sick unit declared by the BIFR.

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Formalities under EPF Act

Casual workers/ Temporary workers/ Probationary, even if they had performed work even for a day, are technically taken into account for the purpose of assessments of strength of 20 for the purpose of applicability of the act and are also covered under the act. Apprentices/ Trainees are excluded from the definition of employees.

Percentage of contribution to be deducted from employees contribution is 12% of his salary, namely Basic + DA , but does not include HRA, CCA, Incentive, Bonus, Washing allowance etc.

Formalities under EPF Act

Employer contribution of 12% of the salary of employees is to be paid as under

• 3.67% to be remitted in Account No.1 ( Employees Account)

• 8.33% to be remitted in Account No.10 towards pension fund

In addition to 12% of the employer has to remit 1.61% paid as under• 1.10% Administrative charges in Account No.2• 0.5% EDLI in Account No.21• 0.01% Inspection charges in Account No.22

Formalities under EPF Act

• To facilitate the employer to make the above contribution a consolidated challan (in quadruplicate) is made in which all the above contributions could be remitted one challan itself.

Compliances under EPF & MP Act, 1952

In SBIBefore 15th of every month

ChallanMonthly contribution of Employer & Employee in Challan for previous month

2.

RPFC officeBefore 25th of every month

12AMonthly Return5

RPFC officeBefore 15th of every month

10Return of Employees Leaving4

RPFC officeBefore 15th of every month

5Return of Employees Qualifying

3.

RPFC officeAt the time of joining

2Declaration Form from new Joinees

1.

Remark / Submitted to

Compliance Date

Form No.

Type of ComplianceSr. No.

Compliances under EPF & MP Act, 1952

RPFC officeWhen new Recruit13Transfer of PF A/c6.

After 5 Years of membership

31Advances for various Purpose

8.

RPFC officeAt the time of Leaving the service

19, 10C & 10D

Final settlement7.

RPFC officeBefore 30th of April3A & 6AAnnual return & reconciliation statement

5.

Remark / Submitted to

Compliance DateForm No.Type of ComplianceSr. No.

Statutory Forms Of Provident Fund

Form 5: Employees qualifying  for PF for first time (Month Wise) Form 10: Employees leaving the service (Month Wise) Form 12A: Statement of contribution (Monthly) Form 3A: Contribution card for specific currency period(Employee wise) Form 6A: Annual Statement of contribution (Company Wise)Declaration: By the

employee Form 2: Nomination and Declaration Form 19: To claim final settlement of Provident Fund by member  Form 10C: Claiming withdrawal Benefit/Scheme certificate Form 20: To claim Provident Fund by nominee/legal heir on death of the member. Form 10-D:To claim pension.  (In duplicate :if within state, in triplicate: if other

state. Form 5IF: To claim assurance benefit under Employees Deposit Linked Insurance

nominee/legal heir of a member. Form 31: To claim temporary withdrawal/advance under Employees Provident

Fund scheme 52. Form 13: To effect transfer of Provident Fund/Pension from one A/c to another

Benefit to nominee of employee:

On the death of an employee while in service

a lump sum insurance amount is payable to his

nominee or family members.

The insurance amount is equal to the average balance in the account of the deceased employee in the

Provident Fund during a period of 12 months immediately preceding

his death. In case the average balance exceedsRs.35,000/- the insurance amount payable is Rs.

35,000/-plus 25% of the amount in excess of Rs. 35,000/- subject to a

ceiling of Rs. 60,000/-.

APPEAL & EMPLOYER’s OWN PF A/C AUTHORIZATION

•Appeal against various orders passed under the Act can be made to employee’s PF Appellate Tribunal. Appeal is entertained only after depositing 75% of the amount demanded.

Appeal :

•An application form provision is made to central Government.

•The application must be made by employer and majority of employees.

•The establishment employs 100 or more persons.

•The establishment hasn’t committed any default in the payment of PF contribution or any other offence during 3 years immediately preceding the date of application.

•The Central Government has authorized the employer by an order in writing to maintain a PF A/C

Employer’s Own PF A/c

Authorization:

TERMS & CONDITIONS OF AUTHORIZATION

Manner of maintenance

of PF A/C.

Submission of Returns.

Manner of Depositing the Contribution.

Facilities to be provided for inspection.

Payment of Administrative

charges.

Other terms & conditions.

TRANSFER OF ACCOUNTS & PENALTIES

Transfer of A/C:

If the new establishment is covered under PF act;

If the new establishment is not covered under the PF act;

If the old establishment was not covered under the PF act.

Penalties:

Any false statement/ false representation/ avoiding any payment of benefits under the Act- 5 years imprisonment or Rs. 25,000 or both.

POWERS OF INSPECTOR

To collect information & ask to furnish Information on

amount recoverable;

Enter establishment at any time and require an

employee to produce before him examination

any accounts, books, register or documents

relating to employment of persons.

Make copies from books, register or

other documents in relation to

establishment.

The End