EPF Act 1952
The EPF act in India also known as the EPF act 1952 or the Employees' Provident Fund Scheme 1952 is a provision for securing the right- to work, education, unemployment, old age, sickness & disablement needs to be made by every state in India.
To secure the wellbeing of the employees in times of distress, the EPF act in India was formulated. The Employees’ provident fund scheme or the EPF act 1952 which is the official EPF act in india takes care of following needs of the members:
- Medical Care
- Family obligation
- Education of Children
- Financing of Insurance Polices
EPF Rules and Regulations
The following are the basic EPF rules and regulations:
Both the employer and the employee need to contribute 12 % of the basic wages, dearness allowance and retaining allowance, if any, of the employee every month to the EPF fund. The rate of contribution is 10% in the case of following establishments:
- Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97.
- Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction,
- Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and
- Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/ Factories. The contribution under the Employees' Provident Fund Scheme by the employee and employer will be as under with effect from 22.9.1997.
The interest rate o the deposit is paid to the employee and is fixed on an annual basis by the Central Government in consultation with the Central Board of trustees. The interest amount is not paid out, but is rather credited to the employees provident fund account.
The EPF rules and regulations need to be adhered to at all times and this is monitored by the regional EPFo’s.
EPF Rules For Withdrawal & Transfer
The following are the EPF rules for withdrawal and transfer:
A provident fund member can withdraw complete amount from the fund once he attains the age of 55. Cases where withdrawal can be possible before attaining age of 55 are:
- At the time of Termination of service
- Retirement on account of total disablement
- Migration to other countries for permanent settlement
A member can withdraw up to 90% of the amount of provident fund after attaining the age of 54 and before 55 or actual retirement on superannuation which ever is earlier. This claim can be done by submitting form 19 to the concerned EPF.
In cases of withdrawal from accounts of deceased members, the provident fund can be withdrawn by legal heirs by submitting form 20 to the concerned EPF
One can also Transfer of Provident Fund account from one region to other, from Exempted Provident Fund Trust to non exempted Fund in a region and vice-by filing application for form 13 to the concerned EPF.
Annual statements of account are sent to each organization one the account for the year are closed. EPF rules for withdrawal are stated very clearly and the procedure for the same is also very easy to follow.
PF Rules For Employer
The Following are the PF Rules For Employer:
The employer needs to e registered and deposit the pf amounts in the following cases:
- Establishments employing 20 or more persons
- Co-operative Societies, employing 50 or more persons & working without the aid of power.
- Establishments not coverable statutorily can come under the coverage of the Act statutorily.
Statutory Contributions by The Employer
- Statutory rate of contribution is 12% of basic wages, dearness allowance, cash value of food concession and retaining allowances if any need to be deposited
- Rate of contribution is 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector, sick industries.
- A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer’s share of contribution, 8.33% is to be remitted towards pension fund.
- Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS’1976.
Apart from this the employer is obliged to pay certain charges like administration charges (1.1%) and EDLI scheme charges (0.01%), Inspection charges (0.18%), damages/penalties is nay ranging from 17% to 37% incase of delay.
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