There are two types of Provident Fund:
1. PPF - Public Provident Fund
2. EPF - Employee Provident Fund
In an organization, we are concerned with EPF.
P.F (PROVIDENT FUND):
1. PF is a statutory deduction. It is deducted on Basic + D.A + Cash value of Food Allowance @ 12%.
- 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 or Capped Basic. Capped basic is decided based on company rules and is not restricted. It is applicable to those employees whose basic exceeds Rs. 6500/- only.
3. Employer and Employee Contributions 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 Family Pension Fund and 3.67% on Employee Provident Fund.
4. Every month, the Employer needs to pay additional charges over and above PF Company Contribution as per the below breakdown:
- 1.1% P.F Administration Charges,
- 0.5% on Employee Deposit Linked Insurance (E.D.L.I),
- 0.01% E.D.L.I Administration Charges.
- In the case the company has exemption in EDLI u/s 17(2a), the company need not pay employee deposit-linked charges of 0.5%, and the administration charges are levied at 0.005% instead of 0.010%.
5. The company needs to file Monthly and Annual Returns. Every month, the company has to submit 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 payments.
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 a grace period up to the 21st. Monthly Returns due date is the 25th of the following month, and the Annual Return due date is the 30th of April.
- As per P.F authorities, the fiscal year is 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 (new company employer), and the old employer has to submit Form 3A to the P.F office.
- Employee P.F Number will change with 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, and Form 19 is F.P.F.
10. Recently, P.F Authorities introduced an e-filing system. In this system, we have to submit P.F details every month in both soft and hard copies. There is no need to submit Annual Returns currently.
11. There are 5 accounts in the PF Challan as shown below:
- A/C#01 - PF contributed by Employers & Employees (12% & 3.67)
- A/C#02 – PF administration charges (1.1%)
- A/C#10 – Pension Fund Account (8.33%)
- A/C#21 – EDLI charges (0.5%)
- A/C#22 – EDLI Administration charges (0.10%)
Visit this site -
EPFO for all the necessary information.