Provident Fund Compliance – Your Complete Checklist is Here

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What is Provident Fund Compliance

Before we talk about the complete provident fund compliance checklist, let us understand what PF Compliance is about. The Government of India has laid certain rules regarding the Provident Fund that both employee and employers should follow. Under the Employee Provident Fund Law, the employer and employee should contribute 12% in the employee retirement fund. Employers however can limit this contribution to the fixed sum of 15000 of the basic pay. Usually, employees go through this route for the employees who are drawing higher pay checks.

By PF compliance it is meant that both employee and employer should make their contribution as per the land laws. However, apart from the employer and the employee, the Central Government also contributes to the retirement fund of an employee. The share of Central Government contribution is 1.16% of the employee’s basic salary.

Employee Insurance

As per the norm, the members who are contribution to the Provident Fund get life insurance cover during their period of service. The regulation lays down that Employer should contribute 0.5% to the insurance scheme. Nominee of the employee on the other hand is eligible for maximum Rs 1 lakh in case of employee’s death.

Provident Fund Compliance Checklist

There are a few regulations that the corporates should keep a tab on to never miss the deadline and fall short of EPF Compliance. Here is the full checklist on the EPF compliance that a corporate needs to follow.

Payment of Employee/Employer dues/pension/insurance Fund – 15th of the next month

Employee/New Joinee Details – The employer should register the details of the employee within a month from when the coverage is mentioned in the prescribed form

Adding the members – Employer should furnish the details of the newly added members within the 15 days of the next month in the prescribed form.

Nomination of a Member – Compliance needs to be done immediately on joining the fund in the prescribed form

Deleting/Removing a Member – If an employee has left the service, the employer should intimate about the same in the following month in the prescribed form.

Contribution Breakup – The details of both employee and employer contribution should be furnished by 25th of the next month in the prescribed form.

Annual Consolidated Statement of Contribution – Furnished annually along with Form 3A

Return of ownership of the establishment – Under 15 days of the coverage or whenever the ownership changes

PF Transfer – Filing of Form 13 mandatory

So, here are the EPF compliances that the employer should always know about and abide by.

New EPF Amendment Bill 2019

Employees have been waiting for reforms in the EPF Laws and finally Government has paid the heed. The new circular stated that :

  • ‘Wages’ will be defined in line with the Code on Wages 2019
  • Government will be empowered to fix various rates of contribution based on different classes of employees and other factors.
  • The Section 7-A enquiry aka EPF non compliance enquiry should have a 5 year limitation period for initiation
  • Employees can avail the benefits of National Pension Scheme  in lieu of pension benefits under the EPF Act
  • The new law will amplify the monetary penalties in case on non-compliance.

About Author

An MBA in finance, I like to cover the wide range of topics related to Taxation, SEBI, Finance and anything that is Public Helpful. The motive is always to make it simpler for the taxpayers understand the system better and take informed decisions.

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