Are We Calculating Provident Fund Inspection Charges Correctly for Higher Salaries?

I am working with an organization that has its own trust. Currently, we are paying 0.18% inspection charges to the Provident Fund office. My question is, in our organization, many employees' salaries are more than 6500/- per month. Although we have deducted the PF on the actual salary (suppose 10000/- per month), we are only paying inspection charges up to 6500/-. Is this correct, or should we pay the inspection charges based on the actual salary? Please clarify this with the relevant act.

Regards, Sandeep

Hi Sandeep,

In respect of exempted establishments under the PF Scheme, the employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.

In the case of establishments exempted from the EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.

Regards,
Amit Seth.

Dear Mr. Amit,

Thank you for your prompt reply. However, my question pertains to the amount on which we should pay the inspection charges to the department. Suppose an employee receives a monthly salary of Rs. 10,000/-, and we are deducting Provident Fund (PF) on the full amount of Rs. 10,000/-. The inspection charges are calculated at 0.18% on either Rs. 10,000/- or on Rs. 6,500/- (the maximum limit of PF), whichever is applicable.

Currently, we are remitting the inspection charges based only on Rs. 6,500/- to the department, not on the full salary amount if it exceeds the limit of Rs. 6,500/-.

I would like to confirm whether our current practice is correct or incorrect.

Thank you.

Dear Sandeep,

After an amendment, the ceiling for PF has already been fixed at 10,000 basic. It would be best if you consulted with your PF authority to clarify whether you are required to pay for the previous period as well.

Amit Seth.

Hello everyone,

Please tell me when we have to deduct the EDLI inspection charge (which is 0.005%).

Dear Sandeep,

As per the PF Act, those who are receiving a salary (Basic + DA) of Rs 6500/- are considered covered employees. However, in companies like yours, there are many exempted establishments that are contributing PF on the actual basic + DA amount, which may exceed Rs 6500/-. Nevertheless, all these exempted establishments are still paying EPS contributions based on a salary of up to Rs 6500/-. The salary ceiling for all statutory payments remains at Rs 6500/-. Therefore, you should pay EDLI & EDLI Administrative charges and inspection charges on salaries up to Rs 6500/- without violating any statutes.

As far as I am aware, the proposal to increase the ceiling for PF deductions has not yet been enacted into law. RPFC/Chambers of Commerce have not issued any circulars notifying their members of this change. I would kindly request Amit to share the circular if he has it.

Please let me know if you need further clarification on this matter.

Best regards

The establishment to which a Relaxation Order is issued or an exemption is granted is required to pay inspection charges at 0.18% of the total wages on which Provident Fund is recovered (and not on 6500) to the Regional Provident Fund Commissioner concerned. This payment should be made by depositing in cash or by local cheque in S.B.I. to the credit of A/C No. 2 of the Employees' Provident Fund, through the prescribed challan.

Clarification on Admin and Inspection Charges for New Challan (01.01.2017)

I have some confusion regarding the administration and inspection charges on the new challan dated 01.01.2017.

In the case of establishments un-exempted from the EDLI & EPF Scheme, what percentage will apply to:

Total EDLI Contribution (ER Share A/C No. 21): ?%

Total EPF Charges (A/C No. 2):
- Administration Charges: ?%
- Inspection Charges: ?%

Total EDLI Charges (A/C No. 22):
- Administration Charges: ?%
- Inspection Charges: ?%

In the case of establishments exempted from the EDLI Scheme but un-exempted from the EPF-EPS Scheme, what percentage will apply to:

Total EDLI Contribution (ER Share A/C No. 21): ?%

Total EPF Charges (A/C No. 2):
- Administration Charges: ?%
- Inspection Charges: ?%

Total EDLI Charges (A/C No. 22):
- Administration Charges: ?%
- Inspection Charges: ?%

Please provide guidance.