Dear Swami,
P.F (PROVIDENT FUND):
1) P.F. is deducted on Basic + D.A + Cash value of Food Allowance @ 12%. It is a statutory deduction. D.A is provided only in government departments. Private companies generally do not give Daily Allowance to their employees.
2) The company pays P.F on either actual basic or Capped Basic. Capped basic is decided depending on Company rules; it is not restricted. It's applicable to those employees whose basic exceeds Rs. 6500/- only.
3) Employers and Employee Contribution are equal in P.F, which is 12%. This means a 12% Contribution from the Employee and a 12% Contribution from the Employer. Company contribution is split into two parts: 8.33% on the Family pension Fund and 3.67% on the Employee Provident Fund.
4) Employers also need to pay additional charges every month over and above PF Company Contribution. The breakup is:
- 1.1% P.F Administration Charges,
- 0.5% on Employee Deposit Linked Insurance (E.D. L.I), and
- 0.01% E.D.L.I Administration Charges.
5) The company needs to file Monthly Returns and Annual Returns. The company has to submit every month a duly paid P.F Challan, Form 12A, Form 5 (additions), Form 10 (deletions), and Nomination Form 2 (newly joined employee details). In the annual Return, we need to file Form 3A and 6A along with the details of Annual PF Challan payment details.
6) The employer needs to collect, certify, and submit the Nomination and Declaration Form in Form-2 of every new joiner to the scheme along with the monthly report.
7) P.F. Monthly payment due date is the 15th (with grace up to the 21st), and the Annual Return due date is the 30th of April every year as per P.F authorities treated one year from 1st March to 28th February.
8) Any employee who wishes to transfer his old company's PF balances can transfer his PF Current A/C using Form 13 signed by the current employer (whom he joined new company employer) and the old employer to submit Form 3A to the P.F office. Employee P.F Number will change for every company.
9) Any employee who wants to encash his P.F amount can draw the total amount using Form 10 C & Form 19. Form 10 C is E.P.F & Form 19 is F.P.F.