Handling EPF Deduction for Exempted Employees: Form 10 Submission Guidance

All Respected Seniors,

I want to know one thing: if we enroll an employee as "Exempted" in payroll and due to incorrect parameters, the payroll deducts his EPF contribution. Even the bank challans are already submitted to the bank. So now, can we stop the EPF deduction for that particular employee in the future? If yes, then how can we do it, and what will be the process for refunding the wrongly deducted contribution?

Thank you.

Dear Bcarya,

At what stage are you currently in? Have you already submitted Form 5, Form 10, and Form 12A along with the challan? Did you include that employee's name in Form 5?

S. Sethupathy
Excellent HR Services
Erode.

Dear Bcarya,

If you have already submitted the Form 5 for the monthly return, then in the next month, in Form No. 10, you should mention the names of those exempted employees. After doing so, you can stop the deduction against their salaries.

Ajay Shankar MGR HR V3S Infratech Ltd.

Dear bcarya,

I mean, this is a serious mistake you have omitted while preparing EPF challan. Once an EPF member is declared exempted from the EPF limit, they cannot be mentioned as EPF members. I totally agree with Mr. S. Sethupathy. Once the member is classified as an EPF member, you have to continue their EPF deduction until their official resignation. Submit Form 5-10 and the nomination form so that their deduction and personal details can be conveyed to the regional office records.

Regards,
Chinmay V. Nanavati.

Thank you to all of you.

Actually, I haven't made this mistake. The payroll software we are using asks (yes/no) to make the employee exempt if their basic pay is above Rs 6500/- at the time of enrollment. However, I was in a hurry and by mistake clicked on "no." So, the software deducted his provident fund. I caught this mistake earlier, but later, I thought, if the mistake was not caught, what are the steps I should take next. That's why I posted this discussion here.

Thank you.

But, here I got 2 different views. Ajay Sir is saying that we can show that person as "Exempt" in Form-10 next month and can stop deducting EPF. Whereas Chinmay Sir agrees with Sethupathy Sir and says that we have to take an official resignation from such employee. Then we can show the employee as "Exempt" in Form-10 in the next monthly return. So, it is something complex. So seniors, please clear this.

Dear Bcarya,

You can show his name in Form 10 and when sending the next monthly returns, attach a separate letter to the PF Commissioner narrating the whole story and explaining why he was wrongly included when he is actually an exempted employee. You can mention as "Exempted-wrongly included" in Form 10. Don't forget to obtain Form 11 from that employee; if possible, send a copy of the same to the EPFO along with the employee's request letter.

S. Sethupathy