EMPLOYEES PROVIDENT FUND

AND MISC. PROVISIONS ACT, 1952

Santosh kumar sharma
Unit-v
 EMPLOYEE PROVIDENT FUND
●
EPF-

PUBLIC PROVIDENT FUND

●
PPF-

GENERAL PROVIDENT FUND

●
GPF-

TYPES OF PROVIDENT FUND

This Act is applicable where 20 or more employees are
employed but in case of a company concerned with
cinema or theatre it is applicable on 5 or more
employee
Employee has right to join it from the day he joins but
after 58 years he is not permitted to contribute in epf.
Where employees get benefits in the nature of
provident fund or old age pension fund from the
establishment which are not less favourable than the
benefits under the Act

Applicability -EPF
contribution
Employees’ share : 12% of the Basic + DA
Employer’s contribution : 12% to be deposited as :

 8.33% to be deposited in Pension Fund A/C No 10 and

the balance, ie, 3.67% to be deposited in Provident
Fund A/C No 01 along with Employees’ share of 12%
Though joot factory, spinning factory, klin, bidis
factory employee contribute 10%
The same amount is to be paid by the employer as
contribution in EPF
If employer delayed or fault to deposit interest is to be
paid by him.
Contribution
Administration charges -
 @ 1.1% of the total wages/salary disbursed by deposit
to A/C No 02,
Employees Deposit Linked Insurance @ 0.5% of the
total wages/salary by deposit to A/C No. 21 and
Administration of EDLI @ 0.01% of the wages/ salary
by deposit to A/C. No. 22.
Incomer tax relaxation
Money deposited in EPF is exempted from income tax
purview under section 80-c
If employee regularly deposit in EPF for 5 years, in the
same job or in different jobs, money withdrawal is
exempted from income tax
But if money is withdrawal before five years income
tax shall be levied
Interest paid on EPF
During Financial year 2006-07 the Central Trust
Board decided the interest Rate 8.5% but now this
has been changed for financial year 2010-2011 to
9.5%.
Membership
An employee at the time of joining the
employment and getting wages up to Rs.6500/- is
required to become a member.
an employee is eligible for membership of fund from
the very first date of joining a covered establishment
When money can be withdrawn
Can be withdrawn with filling appropriate
forms and after 5 years continuous
contribution.
In case of death nominees must intimate the
organisation within two months
To purchase land for home construction money
equal to 24 months and account must contain
Rs,1,000.
For purchasing flats payments equal to 36
months.
Cont..
For repairing the house where living from last 5
years amount equal to one year payment can be
withdrawn
To pay loan equal to 36 months pay.
For treatment for grievous disease or surgery,
amount equal to 6 months payment can be
withdrawn
For marriage of self, sister,son or daughter 50% of
the contribution amount can be withdrawn if
contribution is made to the fund for continuous 7
years
Points to remember
Employee should be aware whether amount for epf is
being deducted or not
There is not agent chain in epf
Someone must be nominated if not all the members of
the family shall have the equal amount
If job is changed money can be transferred but if
amount exceeds 2000 rupees it shall be transferred in
employee bank account
If employee wants to increase the contribution of
provident fund it may be by intimating employer
GPF-GENERAL PROV.FUND
All temporary central employee who completed one
year in service and permanent employee can deposit
money in gpf
From 6 to 100 of the basic payment and dearness
allowance can be deposited
Annual compoundable interest on GPF is 9.5 %
Usually once can be deposited but it may be twice if
amount is large
Money can be withdrawan on
resignation,retirement,death dismissal,but not on
suspension
PPF-PUBLIC PROVIDENT FUND
Started in 1968
Money deposited exempted from income tax
Consultant,shopkeepers,freelancers and even minor
can open their account for ppf
Account can be opened in any nationalized bank or in
post offices
8% compoundable interest is paid
Maturity period is 15 years though it may be extended
to five more years
Cont..
Minimum 500 and maximum 70 thousands rupees annually can
be deposited
During first five years money can not be withdrawn from the
account but later on once during one financial year money can be
withdrawn
But if ppf is for more than 15 years then during extended duration
60% amount can be withdrawn
One person can open one account only, he has two account one
shall be closed or only principal amount shall be given no interest
if account if opened in the name of two minor both can deposit 70
thousand each
Money is to be deposited 12 times rather than once
Schemes under the Act
Three beneficial schemes-

1.Employees Provident Fund Scheme, 1952

2.Employees Pension Scheme 1995

3.Employees Deposit Linked Insurance

Employees Provident Fund Scheme,1952
Fund – Created under Sec 5 and vested in and
administered by the Board created under sec 5A
Contributions to the Fund – Clause 29 :
By Employer - 10% of basic, DA and Retention
Allowance – 12% in respect of establishments/class
specified by CG
Matching contribution by employee
Scheme Applicable to :
All factories and other establishments to which Act
applies or is applied – does not apply to Tea Factories
in Assam
All employees drawing pay upto Rs 6,500 per month
Employees Provident Fund Scheme,1952
Corpus of the Fund under the Scheme to be deposited
with RBI, SBI or any other approved scheduled bank –
clause 48, 52
Corpus to be invested as per direction of CG, in
securities referred to in Section 20 of Indian Trusts Act –
clause 52
Fund cannot be expended for any purpose other than to
credit of individual members
Employees Pension Scheme,1995
Pension Fund – Created under Sec 6A and vested in and
administered by the Board created under sec 5A
Contributions to the Pension Fund – Clause 3:
 By Employee – 8.33% of basic, DA and Retention Allowance –
This is a part of the contribution made to the Fund under the EPF
Scheme
 By CG – 1.16% o the pay
Scheme Applicable to :
 All employees of factories and other establishments to which Act
applies or is applied in terms thereof
Employees Pension Scheme,1995
Scheme to provide for :
Replaces Family Pension Scheme which merges with
this scheme
Superannuation pension, retiring pension, disablement
Widow/widower, children or orphan pension
Corpus of the Pension Fund, except the CG
contribution shall be invested as per directions of CG
in securities referred to in Section 20 of Indian Trusts
Act – clause 26
Cont..
Employees Pension Scheme,1995
Pension Fund cannot be expended for any purpose other
than payments envisaged in the scheme, i.e. payment of
family pension, life assurance benefit and retirement cum
withdrawal benefits – clause 27
Employees Deposit Linked Insurance
Scheme,1976.
Deposit Linked Insurance Fund – Created under Sec 6C
and vested in and administered by the Board created
under sec 5A
Contributions to the Insurance Fund :
 By Employer – 1% of aggregate of basic, DA and Retention
Allowance - Sec 6C(2)
 Upto 0.25% to meet expenses etc. - Sec 6C(4)(a)
Scheme Applicable to :
 All employees of establishments to which the Act applies
Cont..
To provide life insurance benefits
Investment of funds in the Insurance Fund :
 Funds contributed into the Insurance Fund upto 31.3.1997 to be
deposited with CG and shall fetch statutory interest @8.5% per
annum.
 From 1.4.1997- Corpus of the Fund under the scheme to be
deposited with RBI,SBI or any other approved scheduled bank
and invested as per direction of CG in securities referred to in
Section 20 of Indian Trusts Act
Insurance Fund cannot be expended for any purpose
other than payment of benefits under the scheme –
clause 17(1)
 o Constituted by notification by CG –
sec 5A
o Trustees appointed for a period of 5
years
o To administer the Funds in respect of
the Schemes provided by the Act and
to effectuate the provisions of the
scheme
o Appoint Central Provident Fund
Central Board Commissioner to act as the CEO of
the Board
Composition

o Chairman & Vice Chairman

o Not more than 5 persons from the
CG officials
o Not more than 15 persons
representing state government
o 10 persons representing the
employers of the establishments to
which the respective schemes
apply
o 10 persons among employees
Powers of Central Government

 The Central Board to act through its

functionaries such as the the Executive
Committee, Central Provident Fund
Commissioner (CEO of the Board), Regional
Commissioner.

 Till the time the Board is constituted the CG

shall administer he Fund and may exercise
any of the powers and discharge the
functions of the Board
 Power to give directions
 Power to make rules
 Power to remove difficulties
Adjudication
 Appeal to Tribunal
 Any person aggrieved by a notification of the CG or
by any order of the CG or any authority
(Commissioner) under the Act, can prefer an appeal
to a Tribunal
 Penalties & Prosecution
 Under the Provident Funds Scheme & the deposit –linked
insurance scheme any person who avoids making any
payment shall be punished with an imprisonment for a
term that may extend to one year and a fine of Rs. 4000.

 Under the Employees Pension Scheme any person who is

guilty of contravention of or non-compliance of any
provision/requirement of the scheme shall be punishable
with imprisonment that may extend to one year and with
fine that may extend to Rs. 5000/
Duties of employer
Employer to furnish information about:
(a) Ownership and names of responsible persons of
the establishment.
(b) Declaration and nomination.
(c) Joining and leaving of service by the members
in form 5 and form 10 respectively
(d) Form 12A with monthly challans of deposit.
(e) Form 9 for details of employees.
(f) Form 3A/6A at the end of the financial year.
(g) Any other information as may be required
under Para 76 of the scheme
 Benefits to employees

first second third

Provident
Pension Death
fund
benefits benefits benefits

benefits
Provident Fund Benefits
Employer also contributes to Members’ PF @
3.67% (1.67% in case of sick industry - eg: beedi)
EPFO guarantees the Employer contribution and
Govt. gives a decent interest to PF accumulations
Member can withdraw from this accumulations to
cater financial exigencies in life - No need to refund
unless misused
On resignation, the member can settle the account. i.e.,
the member gets his PF contribution, Employer
Contribution and Interest
Pension Benefits
Pension to Member
Pension to Family (on death of member)
Scheme Certificate
This Certificate shows the service &
family details of a member
This is issued if the member has not
attained the age of 58 while leaving
an establishment and he applies for
this certificate
Cont..
 Member can surrender this certificate while
joining another establishment and the service
stated in the certificate is added with the
service he is gaining from the new
establishment.
 After attaining the age of 50 or above, the
member can apply for Pension by surrendering
this scheme certificate (if total service is at
least 10 years)
 This is a better choice than Withdrawal Benefit,
that if a member dies holding a valid scheme
certificate, his family will get pension (Death
when NOT in service
Pension benefit-cont..
Withdrawal Benefit
 if not eligible for pension, member may withdraw the amount
accumulated in his pension account
 the calculation of this amount is based only on (i) Last
average salary and (ii) Service (Not based on actual amount
available in Pension Fund Account)
 No amount is taken from Member to give Pension to the
Member. Employer and Govt. contribute to Pension fund
@8.33% and @1.16% respectively
 EPFO guarantees pension to members, even if the Employer has
not contributed to Pension Fund.
 Pension calculation is similar to that of Govt. Employee
Death Benefits
Provident Fund Amount to Family (or to Nominee)
Pension to Family (or to Parent / Nominee)
Capital Return of Pension
Insurance (EDLI) amount to Family (or to Nominee)
 No amount is taken from Member for this facility. Employer
contributes for this.
Nominee is basically determined as per the
information submitted by the member at this office
through FORM-2
Offices
NORTHERN REGION: Punjab, Uttar
Pradesh,himachal Pradesh,uttaranchal,haryana,delhi
SOUTHER REGION: Tamilnadu, Andhra
Pradesh,kerala, Karnataka
WESTERN REGION: Rajastan, Gujarat,madhya
Pradesh,chattisgarh,maharashtra
EASTERN REGION: Orissa,west Bengal,bihar,
Jharkhand,north East Region