PF on Arrears Payment - EPF site has charged me 7Q and 14B damages and interest

I paid salary arrears to my employees for the months of June to August in December. Accordingly, I paid the PF for the same on January 7, 2018, clearly mentioning while preparing the challan as arrears for June to August. The delay was on account of the Principal Employer needing time to get approvals from his HO.

Now, the EPF site has charged me 7Q and 14B damages and interest.

Kindly advise.

In a computerized system of making payments, you cannot write much more than what the system permits. Therefore, you should have written the amounts in the "other" column of the challan. Otherwise, you should have clubbed the salary for December and the arrears and paid it without showing the arrears separately. You should have also had an opportunity to show cause when you received notice. Now, you may file a review petition describing that the amount paid was arrears of salary and there was no delay in payment.

Dear Madhu, in the first place, clubbing the arrears and the monthly pay is valid when we have an option of paying the arrears. Will the EPFO charge interest on the arrears amount as the word "arrears" itself defines the due payment and not "late payment"? In case we club the arrears and monthly pay, and the employee has non-contributory record (NCR) days, will it affect the pension amount on NCR days? In the next month, again, the gross wages will come down with the difference of the arrears amount. Requesting advice on the effect of the same.

Regards, Umesh

Paying PF on Salary Arrears

There is nothing wrong with paying the PF on arrears of salary along with the current month's contribution. It is true that in the next month, the contribution will come down, but that is not an issue. At the same time, if you pay it as arrears, it will be presumed that it is a late payment of PF. This will attract interest and damages. Therefore, if you have revised the salary effective from 1st April 2019 and the arrears of salary are paid only in August 2019, you can club the salary of August and pay the contribution for the whole amount.

Is 7Q and 14B applicable for arrears payment of EPF?

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The corrected text is as follows:

Is 7Q and 14B applicable for arrears payment of EPF?