PF Compliances

Just like ESI, the Employees Provident Fund (EPF) is also a contributory fund in which both the employee and employer contribute a specific amount. EPF is a compulsory and contributory fund for the Indian organizations under “The Employees’ Provident Fund and Miscellaneous Provisions Act 1952”.

For PF, both the employee and the employer contributes equal amount, which is 12% of the salary of the employee. However, the employee contributions may differ. Employees can contribute more than 12% of their salary voluntarily. However, in such a case, the employer is not bound to match the extra contribution of the employee.

For PF contribution, the salary comprises of components such as: basic wages, DA, conveyance allowance and special allowance (if any).

For the PF deduction, the maximum limit of salary of the employee is Rs. 15,000 per month. This means that even if the employee’s salary is above Rs. 15,000, the employer is liable to contribute his part of mandatory contribution only on Rs 15,000.

Social reasons aside, it goes without saying that the above compliances are thoroughly ensured and followed to the letter by employers as the Provident Fund Act imposes penal provisions upon employers for contravention of provisions under it, which include fines and/or imprisonment.

An employer covered under the Provident Fund Act, 1952 has to ensure mainly following compliance with the following requirements –

• Every employee must file Declaration and Nomination Form as given in Form 2 as prescribed under Para 33 & 61 (1) of the Employees’ Provident Funds Scheme, 1952 and Para 18 of the Employees’ Family Pension Scheme, 1971.
• An employer must prepare Contribution Cards in Form 3-A as prescribed under Para 35 & 42 of Employees’ Provident Funds Scheme, 1952 and Para 19 of Employees’ Family Pension Scheme, 1971.
• Return of employees qualifying for membership of the Employees’ Provident Fund, Employees’ pension Fund and the Employees Deposit Liked Insurance Fund for the first time in month [to be sent to the Commissioner with Form 2 (EPF & FPF)] is to be sent to Commssioner in Form 5 within 15 days of each month as prescribed under Para 36(2)(a) of Employees’ Provident Funds Scheme, 1952 and Para 15(2) of Employees’ Family Pension Scheme, 1971.
• Return of Ownership must be sent to Regional State Commissioner in Form 5-A as prescribed under Para 36A of Employees’ Provident Funds Scheme, 1952 and Para 1 of Employees’ Family Pension Scheme, 1971.
• Employer, within 1 month of expiration of the period of currency of Contribution Card should send the Contribution Cards to the Commissioner together with statement in Form 6 as has been prescribed under Para 43 of Employees’ Provident Funds Scheme, 1952.
• Employer must send, within 1 month of the close of the currency, a consolidated Annual Contribution Statement as prescribed as Form 6-A as prescribed under Paras 30 & 38(3) of Employees’ Provident Funds Scheme, 1952 and Para 20(3) of Employees’ Pension Scheme, 1995 to the Commissioner
• Returns of members leaving service must be filed in Form 10 as prescribed under Para 36 (2) (a) & (b) of Employees’ Provident Funds Scheme, 1952.
• Statements of Contribution for every month in Form 12-A should be sent to Commissioner by 15th of every month as prescribed under Para 38 (2) of Employees’ Provident Funds Scheme, 1952.

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