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baburao apte
Hello Members, We are an organization with less than 10 employees since inception till date. we had voluntarily opted for PF in 2016 and since have been contributing 12% PF.
As per the contribution rate specified on EPFO website, a 10% contribution rate is applicable to an organization with less than 20 employees. we just recently learned about this and hence would like to ask if we can henceforth contribute 10% and not 12%.

From India, Mumbai

Once you have opted to contribute to the Fund at a higher rate, (both employees and employer) you can not reduce the contribution, on your own.
In this connection, please also refer to Sec-12 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
No employer in relation to [an establishment] to which any [Scheme or the Insurance Scheme] aapplies shall, by reason only of his liability for the payment of any contribution to [the Fund or the Insurance Fund] or any charges under this Act or the [Scheme or the Insurance Scheme], reduce, whether directly or indirectly,

From India, Aizawl
Srinath Sai Ram

Dear Mr Baburao,
Please verify PF Code Number Allotment letter wherein Rate of EPF Contribution is payable based on Type of Industry.Please verify whether your Industry comes under 10% EPF Rate of Contribution.

From India, New Delhi
Srinath Sai Ram

Whether your Establishment falls under Schedule II which are permitted to Contribute @10% to EPF
From India, New Delhi
Bhartiya Akhil

Dear Friends,

I think, our learned friend Nair ji has to re-look to his answer.

The statutory rate of PF is 12% from 22.09.1997 onwards.

Statutory rate at 10% is applicable to only certain establishment only. I am not going in to that in detail.

You can not opt for higher rate for both employees and employer as stated by Nair ji.

Section 12 of the Act is on employer not to reduce wages, etc. has no relevance here.

What Baburao ji read on EPFO website is not fully understood by him as what I feel. By virtue of having less than 20 employees he can not have statutory rate at 10%.

It is stated in the amendment of 1997 enhancing the rate from 10 % to 12 % that this amendment is not applicable to covered establishment with less than 20 persons on the date of the notification, as what I recollect now. I may be wrong in quoting this but I am sure that you can not have statutory rate at 10% by virtue of less than 20 employees. When you apply under section 1(4) you get the code draft for 12% and not for 10%.

Those days I resumed my profession and therefore, I can not be on this forum for unlimited time as I was till last week. Therefore, I am posting it very hurriedly.

From India, Mumbai
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