When I wrote a post about the recent changes of EPF effective from 1st Sept 2014, I found that many employees not aware about the basic things about EPFO. Employers use this as a tool to modify the rules to their wish. Hence, thought to summarize the basic things in this post.
Note-We have deactivated the comment section for this post. Hence, if you have any doubt regarding EPF, you can raise thm in our BasuNivesh Forum.
Latest News-
- 4 EPF withdrawal changes effective from Feb 2016
- Now you can withdraw EPF without your employer signature. Read my latest post on the same “New EPF Withdrawal Forms-Withdraw without employer signature“
- Check EPF (Employee Provident Fund) balance through Mobile Phone SMS
1) Which establishment or company eligible for this scheme?
This scheme applies to all companies or establishment, which employs 20 or more than that. Do remember that once the employees’ strength reaches to 20 or more then irrespective of employee strength (whether fall or rise) the company must continue with this scheme. However, suppose company or establishment stopped its operation or continue without any employee then in that case this scheme not applicable. In addition, employee if considered as trainee or apprentice will not be covered under this act.
2) Which employees are excluded from this scheme?
- An employee who was a member of this scheme and withdrawn all amounts of his contribution based on either retirement from service after attaining age of 55 years or who migrating abroad for permanent settlement.
- An employee whose salary (BASIC+DA) at the time of entry into scheme more than Rs.15, 000.
- If a member is considered as an apprentice then he will not come under EPF.
3) What do you mean by salary for this purpose?
Salary for this purpose is only BASIC+DA. Also remember that if your salary at the time of entry is Rs.15, 000 or less than that, but after a few years or a month if your salary revised then raised to more than Rs.15, 000, then in that case too member must continue with this scheme. So for example, this month your salary is Rs.14, 000 and you are a member of this scheme. But in March 2015 your salary revised and crossed the limit of Rs.15, 000 then too you need to continue with this scheme.
Only employees who are eligible to stay away from this scheme are those whose salary are more than Rs.15, 000 at the entry of employment.
4) What is the contribution percentage of employer and employee?
The detailed, recent changes are written in my earlier post. Please go through it and available in below link.
5) Whether one can mention nomination?
Yes, one needs to nominate for EPF. This helps to get the money in case of sudden demise of member. Usually if the member is married, then he should nominate to spouse or kids. If he is unmarried then he can nominate his parents. Brothers or sisters are not allowed for nomination. However, one can mention multiple nominations and must disclose the percentage of sharing. In addition, if member doesn’t have any family members then he can nominate anyone of his choice. Do remember that once the member acquire a family, then such nomination will become void.
6) What about arrears if one receives due to salary revision?
Salary revision is considered a normal hike. Therefore, any such arrears payable to the employee are subject to EPF deduction.
7) Whether an employee contributes more than 12% of his salary?
Yes, you have the option to contribute more. But the employer has no such obligation to match your contribution. Such contribution is called Voluntary Provident Fund (VPF). Interest benefit will be same as that of EPF.
8) Who is responsible to deposit to EPF Scheme?
Your employer has whole responsibility to deposit all amounts, which is deducted from the employee as well as an employer contribution.
9) My employer deducting his contribution from my salary, whether it is legal?
According to EPF rules, an employer can’t deduct it from employee salary. It is illegal. I found that after revising rules from 1st Sept 2014, few employers started to deduct their contribution from the employee. This is illegal.
10) Whether my employer can split salary components after 1st Sept 2014 to reduce his contribution towards EPF?
This was happening since the latest changes and many of the readers of my post mentioned this. But such activity is also considered as illegal. Please read below lines of rules, which by Fund Commissioner. I found this information HERE.
“Any agreement entered into between the employer and its employees for splitting of the amount payable by the employer to its employees for the service rendered by them, cannot take away the power of the Commissioner under Section 7A of the Act to look into the nature of the contract entered into between the employer and its employees and decide that splitting up of the pay payable to the employees under several heads is only subterfuge to avoid payment of contribution by the employer to the provident fund. It was open to the Commissioner to lift the veil and read between the lines to find out the pay structure fixed by the employer to its employees and to decide the question whether the splitting up of the pay has been made only as a subterfuge to avoid its contribution to the provident fund.”
11) Whether I am eligible for withdrawal of EPF? What will be tax treatment on the same?
Both the questions are already answered in my earlier posts and links will be below.
12) Whether EPFO comes under RTI?
Yes. This being Govt. Organization, it will come under RTI Act.
13) Is it legal to withdraw EPF during job?
It is illegal if you withdraw your EPF during typical job change. One can withdraw EPF only if one has no job for 2 months. Otherwise withdrawing for any new job change is actually illegal. Rules allows only to transfer in case of job change.
14) How you can receive EPF withdrawals?
Currently any EPF withdrawal will be credited to beneficiary bank account directly. So no need to worry.
15) How is interest calculated on EPF Account?
You can view the detailed explanation about the same in below link.
Hope above few important questions resolve your doubts 🙂
Note-We have deactivated the comment section for this post. Hence, if you have any doubt regarding EPF, you can raise thm in our BasuNivesh Forum.
View Comments (859)
Sir,
I am Mohammad M Khan , I have checked my PF withdrawal status. It looks like my PF form has been rejected due to some reason and rejection letter has been dispatched to my address . I have not received it yet and i am not able to send them other form as i don't know the actual reason why PF office reject my form .
Can you please investigate the issue and let me know what exactly the problem was, because of that they reject my form.?
STATUS for Member ID: PYKRP00192140000199184
Claim ID : PYKRP160500005087
Status : Claim Form 31 for PF Advance AGAINST Member Account No (PYKRP00192140000199184) has been rejected. Rejection letter is under dispatch/ dispatched to address in your claim.
Reason of rejection: The reason of rejection is not available in database. You may please contact RO/SRO KRPURAMWHITEFIELD for further details
Now I see another information in the bottom>>Remarks by DA/AO:APPLICATION SUBMITTED AFTER MARRRIAGE/OK
I work for Ibm India and sent all the documents before my sisters marriage..Iam very tense and depressed, Please help.
Regards,
M M Khan
Khan-Please contact EPFO Greviance Cell Online.
Hi,
Our firm wound up last day of 2015. We have been paying minimum admin charges of 100 (75+25) since then. Inadvertently we missed paying this amount for May payable in June. Any idea how we can generate a challan & pay for a previous month.
TIA
Thyagarajan-I am not an expert to guide employer. But suggest you to contact the local EPFO.
Hi sir, sorry for disturb u again,
i worked in Tech mahindra for 6 month and i absconded from there and joined in new company.i have PF number for both company.
1)Is it possible to get the UAN number from the current company ?
2)is there any way to get the PF amount from my last company?
Ashad-1) If you already have UAN then use the same. If not then let your current employer activate the new one.
2) Yes, without employer signature you can do it. Otherwise, you can opt for online transfer using OTCP portal of EPF.
Today i went PF office to submit withdrawal forms and submitted successfully. therefore it will be rejected because personal detail like NAME, D.O.B, wrongly registered and this fault is from employer. so please provide solution wheather i can go legally or not
Satish-If they are wrong, then let them rectify (your employer).
so u r saying that absconding wont make a problem in PF transfering
Asha-Absconding may be an issue for employer. But as per EPFO rules it is NOT.
so with out the help of old company i can transfer the old pf amount?there is no approval need from their side?
Ashaa-Approval required and they have to approve. You no need to worry.
Hai, my previous employer not credited my pf amount in pf account (i.e 9 months pending out of 21 months) and current employer said that if your account is transferred from previous employer to current employer then you lost your pending amount. plz tel me what i do now. my mail id is : srikanthbcm14@gmail.com.
Srikanth-If it is transferred, then it is not lost. He is giving you wrong information.
Hello sir,
In EPF ECR file where to put the four month epf arrear amount along with the monthly contributaion (ie) in june month contribution and jan, feb, mar, apr arrear amount in Ecr.
Geetha-I am not an expert to guide an employer.
Dear sir,I am giving you more clarification..
I have joined the institution on 1st april 2013 .In first whole year(1st april 2013-31march 2014) my pf was not deducted..
Please make me more clear.
Dear sir,
Please clear my doubt regarding deduction of PF.
I joined an institution on 1st april 2013,from 1st april 2013 to 31 march 2014 my pf was not deducted.my salary was Rs 25000 consolidated.can employer do this?is it legal or illegal.Please answer.
Mintu-How can in middle an employer suddenly stop contributing to EPF? It is illegal.
Hi sir, i have UAN number and im geting my passbook in the portal,now i joined in new company and i got new pf number.how can i merge this to my existing account?
Ashad-Apply for transfer using OTCP.
Some of my employees want to opt out of pf scheme as they are geting more than 15000 per month salary, i got to know that they are required to fill and submit form no. 11. My doubt is in form no. 11 point no. 17 where KYC details are required , they need to fill up bank details with IFSC code and it is mandatory . if an employee doesn't want to enroll in PF scheme so why he/she need to fill the bank details???? Is Form no. 11 acceptable without bank details if the employee is already opting out of PF scheme in new employment. ?????
Dev-Once they are member of EPF, then they have to continue even if their salary raise in middle.
Dear Sir,
Kindly advise on the following queries:
1. Whether PF is payable on Salary Advance? (Company is not in operation for the past 36 months and all employees have been asked not to report for duty, except 10 essential employees who are paid close to their take home pay a round sum amount per month which is treated by the Employer as Advance in its books of account)
2. The Employer has assured these 10 essential employees that if the Company restarts or otherwise the actual salary will be calculated at a later date and the balance amount will be paid to them, if any, after deducting the monthly advances paid. So also they will remit the PF dues for the past period. Is this arrangement in tune with the EPF Rules?
3. In case the Employer settles the 10 Employees in the 39th month as per point no. 2 above, whether the Employer is liable to pay Interest, Penalty and Damages for the past 39 months? (or can the Employer argue his case with the RPF commissioner saying the liability of PF has only crystallized in the 39th month and hence not liable to Interest, Penalty and Damages)
Regards,
Alex
Alexander-1) YES (as per my knowledge).
2) I am not sure of this situation.
3) Check with labour laws.