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If the last day falls on a holiday, PF payments may be made on the following working day: ITAT

If the last day falls on a holiday, PF payments may be made on the following working day: ITAT

Fact and issue of the case

This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-23, New Delhi dated 14.12.2022 pertaining to Assessment Year 2020-21.

The grounds of appeal taken by the assessee read as under :-

That the order of Ld. Commissioner (Appeals) is contrary to the law and the facts of the appellant’s case.

That the AO (CPC) erred in disallowing the PF payment amounting to Rs.89,644/- deposited on or before the due date of filing of Income Tax Return during the year.

That the Ld. CIT (A) erred in holding that PF deposited immediately on the next working day (due date being national holiday) would be considered as delayed payment and attract disallowance u/s 36(1)(va) of the Act.”

Brief facts of the case are that in this case, AO/CPC under section 143(1) of the Income-tax Act, 1961 (for short ‘the Act’) disallowed payment of PF amounting to Rs.89,644/- which was deposited after the due date under the relevant Act. Upon assessee’s appeal, ld. CIT (A) confirmed the same by referring to Hon’ble Supreme Court order in the case of M/s. Checkmate Services Pvt. Ltd. (2022) 143 com 178 (SC).

Against the above order, assessee is in appeal before us. We have heard both the parties and perused the records.

Counsel of the assessee submitted that the last date for depositing of payment of PF was national holiday and in such a situation, the deposit was made on the next date and the same should be accepted. For this proposition, he referred to ITAT order dated 29.05.2023 in ITA No.1843/Del/2021 for AY 2018-19 where, in similar circumstances, ITAT has concluded as under :- “

Observation of the court

In view of the provisions of the General clauses Act, 1897, reproduced above, we feel it appropriate to restore the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly. The grounds raised by the assessee are accordingly allowed partly for statistical purposes.

In the result, the appeal filed by assessee is allowed partly for statistical purposes.”

Upon careful consideration and after hearing both the parties, we agree with the submissions that if the last date for depositing of payment is a holiday and the payment is made on the next date, the same should be allowed, as has been decided in the abovesaid case of ITAT. We also feel it appropriate to remit the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on this 18th day of July, 2023

Conclusion

In the result, appeal of the assessee is allowed and ruled in favour of the assessee

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Reconsideration of Tripoto’s PF/ESI deduction claim is ordered by ITAT

Reconsideration of Tripoto’s PF/ESI deduction claim is ordered by ITAT

Fact and issue of the case

This appeal filed by the assessee is against the order of learned Commissioner of Income-Tax (Appeals)-9, Delhi vide Appeal No.10495/2019-20 dated 31.07.2020 against the order of ACIT, Circle 25(2), Delhi u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 23.12.2019 for AY 2017-18.

There is a delay of 28 days in filing the present appeal. The impugned order by learned Commissioner of Income-Tax(Appeals) is dated 31.07.2020 which is claimed to have been received on 31.07.2020. The said period for filing the present appeal falls during the pandemic of COVID-19 for which Hon’ble Supreme Court in the case of suo moto writ petition (C) No.3 of 2020 dated 10.01.2022 has excluded the period from 15.03.2020 to 28.02.2022 for the purpose of taking into account limitation. Vide this order, a further period of 90 days has been granted for providing the limitation from 01.03.2022. Accordingly considering the said decision and fact of the case, the delay is condoned and the appeal is admitted for adjudication.

The sole issue raised by the assessee in the present appeal is in respect of disallowance made towards delayed payment of employees contribution toward Provident Fund (PF) and Employees State Insurance (ESI) of Rs.6,50,936. Before us, none represented the assessee and Shri Ram Dhan Meena, Sr. DR represented the department. From the perusal of record, we note that assessee has furnished written submission dated 17.04.2023. In the said submission, it is stated that assessee does not want to appear further in the impugned matter and requested the Tribunal to decide the case on the basis of facts and merits of the case by considering the said written submissions. Accordingly, we take up the matter for adjudication.

Assessee is engaged in the business of providing online platform under the domain name http://www.tripoto.com to share and discover travel stories and itineraries and related business opportunities. Assessee filed its return of income on 26.10.2017 reporting a total loss of Rs.4,35,89,518. In the course of assessment, learned Assessing Officer noted that assessee has deposited employees contribution to PF and ESI beyond the due date specified in the relevant statutes amounting to Rs.6,50,936. He, thus, disallowed it and added to the total income of the assessee. Aggrieved, assessee went in appeal before the learned Commissioner of Income-Tax (Appeals) who confirmed the addition so made. Aggrieved, assessee is in appeal before the Tribunal.

Observation of the court

Before us, it is submitted that there are mistakes in the dates which have been taken into consideration leading to the disallowance in respect of the employees’ contribution towards Provident Fund. According to the assessee, the dates mentioned are evidently verifiable from the challans for the deposit of the impugned contribution.

We note from the facts on record that the disallowance has been made on the basis of certain mistaken data taken into consideration in respect of dates of deposits. Before us, in the written submission, the assessee claims that it has deposited the employees contribution of PF of Rs.1,56,185 before the due date of deposits and Rs.5,09,839 after the due dates of deposits prescribed under the relevant statute. Against this, learned Assessing Officer made an addition of the whole amount of Rs.6,50,936. It is claimed that the learned Assessing Officer has not considered the facts correctly.

Considering the facts on record and the written submission of the assessee, we find it proper to remit the matter back to the file of Ld. AO for verification of actual payment dates with the challans for deposit of the impugned contribution in respect of which disallowance has been made. Ld. AO may verify the same and consider the allowance in accordance with the provisions of law as well as taking into consideration the decision of Hon’ble Supreme Court in the case of Chekmate Services Pvt. Ltd. [2022] 143 com 178(SC). Learned Sr. DR did not raise any objection to this effect. Accordingly, ground taken by the assessee in this respect is allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 03.07.2023.

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To clarify the definition of the term “every month” in clause 38 of the EPF system, a matter was pursued

To clarify the definition of the term “every month” in clause 38 of the EPF system, a matter was pursued

Fact and issue of the case

This appeal by the assessee is directed against order dated 15.11.2022 passed by the Ld. Commissioner of Income-tax – National Faceless Appeal Centre [in short ‘the Ld. CIT(A)’] for assessment year 2020-21 in relation to rectification order passed by the Assessing Officer u/s 154 of the Income-tax Act, 1961 (in short ‘the Act’). The grounds raised by the assessee are reproduced as under

On facts and in law, the Learned Commissioner of Income Tax (hereinafter referred to as Ld. CIT–A) had erred in confirming the addition of Rs. 13,41,333/- made w/s. 143(1) by CPC Bangalore. Under the facts and circumstances, he ought to have deleted the addition made by CPC Bangalore

On facts and in law, the Ld. CIT–A had failed to appreciate that the sum of Rs. 13,41,333/ – was paid within due dates; hence the same is allowable u/s. 36(1)(va) r.w.s. 2(24)(x)

On facts and in law, the Ld. CIT–A had erred in not directing CPC to allow credit of Rs. 13,328/ – being the TDS on income which have been offered to tax. Under the facts and circumstances of the matter he should have directed PC Bangalore to allow the credit of TDS of Rs. 13,328/ –

In the ground No. 1 and 2 of the appeal, the assessee is aggrieved with the disallowance upheld by the Ld. CIT(A) in respect of employee’s contribution to ES I/PF, which was made by the CPC as an adjustment and further sustained in rectification order u/s 154 of the Act. The Ld. CIT(A) has upheld the disallowance in view of binding precedent of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v . CIT in Civil Appeal No. 2833 of 2016, observing as under

Having pursued the rectification order, the grounds of appeal and the written submissions, the issue of admissibility of payment of employees’ contribution of SIC/PF beyond the due date as per the relevant Statute, raised through ground number 1 is hot tenable in view of decision of the Hon’ble Supreme Court in the case of Checkmate Services pvt. Ltd. Vs CIT in Civil Appeal No. 2833 of 2016 with CA No. 2830/2016, CA No. 159/2019, CA No.2832/20 16 and CA No: 2831/2016 vide judgment dated 12.10.2022, wherein it was held that deduction us 36(1)(va) of the IT Act is admissible only of the amount so received from employees for PF/ESIC is credited in specified account within the due date as per the relevant Statute. In the instant appeal, it is an admitted position of the appellant that there was delay in crediting the contribution so collected in the specified account within the due date as per the relevant Statute

Before us, the Ld. Counsel of the assessee submitted that assessee was engaged in providing manpower securities services etc. He submitted that salary/ remuneration payment to staff for the month was paid in subsequent month, preferably before 7 thday of next month. For example, payment for month of April 2019 was paid on or before 7thof May 2019. The Ld. Counsel referred to the provisions of section 36(1)(va) of the Act and submitted that employee’s contribution was deposited as per the due date prescribed under the relevant Act. The Ld. Counsel further referred to the employee provident fund scheme 1952 formulated under the provisions of the relevant Act. The relevant clause no. 38 of the scheme is reproduced as under: “38. Mode of payment of contributions

The employer shall, before paying the member his wages in respect of any period or part of period for which contributons are payable, deduct the employee’s contribution from his wages which together with his own contribution as well as an administrative charge of such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may fix, he shall within fifteen days of the close of every month pay the same to the Fund by separate bank drafts or cheques on account of contributions and administrative charge

[Provided that if the payment is made by a cheque, it should be drawn only on the local bank of the place in which deposits are made.]

Provided further that where there is no branch of the Reserve Bank or the ‘ State Bank of India] at the station where the *[factory or other establishment] is situated, the employer shall pay to the Fund the amount mentioned above by means of Reserve Bank of India [Government Drafts at parl separately on account of contributions and administrative charge

The employer shall forward to the Commissioner, within twenty-five days of close of the month, a monthly abstract in such form as the Commissioner may specify showing the aggregate amount of recoveries made from the wages of all the members and the aggregate amount contributed by the employer in respect of all such members for the month

Provided that an employer shall send a Nil return, if no such recoveries have been made from the employees

Provided further that in the case of any such employee who has become a member of the Pension Fund under the Employees ‘ Pension Scheme, 1995, the aforesaid Form shall also contain such particulars as are necessary to comply with the requirements of that Scheme

Observation of the court

We have heard rival submission of the parties on the issue-in-dispute and perused the relevant material on record. The issue-in-dispute is in respect of employee ’scontribution to provident fund (PF) and employee state insurance corporation (ESIC) fund amounting to Rs.84,43,087/ – and Rs.8,58,774/- The provisions of the Act provide for payment of the employee’s contribution of PF/ESI on or before the due date prescribed under the relevant PF/ESI and the issue-in-dispute is in respect of due date prescribed. According to the assessee, the due has to be reckoned within 15 days from the close of the month in which payment is made to the employee, whereas according to Revenue the contribution has to be deposited within the 15 days from the close of the month for which salary/wages of the employee is due. The Ld. Counsel has referred to the decisions of the Ho n’ble Calcutta Tribunal in the case of Kanoi Paper & Industries Ltd. v. ACIT ITA No. 1260/Cal/1996. The relevant finding of the Tribunal is reproduced as under

Clause 38 of the Employees’ Provident Fund Scheme, 1952, fixes the time limit for making payment in respect of contribution to the provident fund to be 15 days from the close of the month concerned. However, the issue here is whether the “month” should be considered to be the month to which the wages relates or the month in which the actual disbursement of the wages is made, we are of the considered opinion that the expression “month” should mean here the month during which the wages/salary is actually disbursed irrespective of month to which the same relates. Thus, the scheme of the government in this regard is that once a deduction is made in respect of the employees’ contribution to the provident fund from the salary/wages of the employee or the employer also makes his contribution, factually at the time of disbursement of the salary the payment in respect of such contribution should be made forthwith. If for some reason or other the payment of salary for a particular month be held up for considerable period of time it cannot be said that the employer would be liable to make payments in respect of the “employer’s” as well as “employees” contribution in respect of wages for such period within a period of 15 days from the close of the month to which the wages relates. On the other hand, in our view, most appropriate interpretation would be that the employer would be at liberty to make payment of the contribution concerned within 15 days (subject however to the further grace period) from the end of the month during which the disbursement of the salary is actually made and the contribution of the, provident fund are, thus, generated, inasmuch as, the provision relating to the disallowance of such contribution on account of delay is rather an artificial provision. In our view, a liberal approach has got to be made to this issue. Ultimately, therefore, we reverse the order of the lower authorities and direct the assessing officer to examine whether the payments of contribution in the present case were made within 15 days (allowed with further grace period of 5 days) from the close of the respective months during which the disbursement of the salary/wages were actually made. The assessing officer should recompute the amount disallowable, if any, on the above basis and take appropriate action accordingly

In our opinion, it will be appropriate if the term ‘every month’ specified in Provident Fund scheme, whether it is the month for which salary/wages are due or month of the payment is referred to Relevant Authorities for finding out with reference to any judicial precedent in respect of provisions of the relevant Act. Accordingly. we restored this issue back to the file of the Ld. Assessing Officer with the direction to find out from the relevant PF authorities about the term ‘every month’ as mentioned in clause 38 of the employees provident fund scheme. Similarly, he may find out from the ESI Authorities. It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. The ground s of appeal of the assessee are accordingly allowed for statistical purposes

In the result, the appeal of the assessee is allowed for statistical purposes

Order pronounced in the open Court on 26/04/2023

Conclusion

In the result, appeal of the assessee is allowed and ruled in favour of the assessee

Read the full order from here

Master-Polishers-Vs-ADIT-ITAT-Mumbai-2

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Delayed remittance of Employees’ PF/ESI may be prohibited by applicable law. Section 143(1) modification

Delayed remittance of Employees’ PF/ESI may be prohibited by applicable law. Section 143(1) modification

Fact and issue of the case

The assessee is in appeal before us with regard to the disallowance of Rs. 16,26,688/- towards employees’ contribution to PF and ESI under Section 36(1)(va) of the the Income Tax Act, 1961 (the Act) by way of the following grounds: – “1. The order of the CIT(A) is wrong, untenable in law, opposed to facts and is liable to set aside. 2. The CIT(A) failed to consider the fact that the proceedings u/s.143(1)(a) permits only prima-facie adjustments and a debatable issue falls outside the ambit of adjustment contemplated u/s.143(1).

The CIT(A) merely placed reliance on the decision of the Hon’ble Supreme Court in Chekamte Services (P) Ltd to hold that the belated employees contribution to PF & ESI has to be disallowed without adverting to specific grounds raised before him pertaining to the assumption of jurisdiction to make such adjustments u/s.143(1)(a).

The CIT(A) failed to appreciate the fact till 12.10.2022 (the day on which the Hon’ble Supreme court passed the order) the disallowance of belated employees contribution was a debatable issue and such adjustments cannot be made u/s.143(1)(a).

The CIT(A) failed to consider the fact that the day on which the impugned intimation was passed (i.e., 11.10.2021) there were divergent views taken by different high courts leaving such issue to be debatable one arid therefore falls outside the scope of adjustments u/s.143(1)(a). 6. The CIT(A) failed to appreciate the fact that the enabling provision having been given effect only from 01.04.2021 by way of amendment of sub-clause (iv) of Sec.143(1). Therefore, adjustment prior to A.Y.2020-21 on account of increase in income is not in accordance with law.”

The learned A.R. submitted as follows:

Appellant filed its ROI on 07.11.2020. It was processed u/s.143(1) and the AO, CPC disallowed a sum of Rs.16,26,688/- vide intimation u/s.143(1) dated 11.01.2021. Aggrieved, an appeal was filed before CIT(A) wherein specific grounds on validity of 143(1) and also on merits was raised. The Ld. CIT(A) relying on the decision of the Hon’ble Supreme Court in the case of Checkmate Services (P) Ltd dismissed the appeal without adverting to the adjustments which fall outside the scope of Sec.143(1) of the IT Act.

It is submitted that the AO, CPC vide his standard communication for proposal dated 23.11.2020 proposed to disallow the belated contribution of employee’s towards PF & ESI on the following counts; (a) Sub-clause (i) of Sec.143(1)(a) on account of arithmetical error;

(b) Sub-clause (ii) of Sec.143(1)(a) on account of incorrect claim which is apparent from any information in the return;

(c) Sub-clause (iv) of Sec.143(1)(a) on account of disallowance of expenditure indicated in the audit report but not taken into account in computing total income;

Observation by the tribunal

The Tribunal in coming the aforesaid conclusion placed reliance on another Coordinate Bench in the case of Kalpesh Synthetics Pvt Ltd Vs. DCIT 195 ITD 142 (Mumbai) wherein the ITAT, Mumbai Bench took the view that where CPC while processing return u/s.143(1)(a) cannot disallow Employee’s contributions (PF/ESI) claimed as deduction by an assessee-employer in respect of employee’s contribution towards PF by invoking section 143(1)(iv)(a). The Tribunal held that the said disallowance was based on observations made by tax auditor in audit report which stated that payments of employee contribution were made by assessee after due date specified under respective acts as judicial decisions have taken the view that said disallowance would not come into play when payment was made well before due date of filing income tax return under section 139(1) and therefore information provided in tax audit report would cease to be relevant and no disallowance can be made during assessment proceedings under section 143(1)(iv)(a).

The decision was rendered by the ITAT Mumbai Bench in the case of Kalpesh Synthetics (P) Ltd. (supra) on 27.4.2022 prior to the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd., (supra) and therefore not applicable. The decision rendered by ITAT Mumbai Bench in the case of M/s. P. R. Packaging Services, follows the decision in the case of Kalpesh Synthetics (supra). In paragraph 5 of the order, a reference has been made to the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd., (supra) but has been distinguished on the ground that the said decision was rendered in the context of assessment framed u/s.143(3) of the Act and therefore not relevant for processing returns u/s.143(1) of the Act. If the basis of decision of ITAT Mumbai in the case of Kalpesh Synthetics (supra) is that clause (iv) of Sec.143(1)(a) cannot be invoked to disallow delayed payment of employee’s contribution to ESI and PF made by the assessee beyond the due date as prescribed under the relevant law relating to ESI and PF for deposit of employees share of contribution, by invoking the provisions of section 36(1)(va) of the Act, if the said contributions are paid within the due date for filing return of income u/s.139(1) of the Act, owing to decision of High Court in favour of the assessee and if those decisions of High Courts stand overruled by decision of Supreme Court in the case of Checkmate Services Pvt. Ltd., (supra) with retrospective effect, then the very basis of the decision rendered in the case of Kalpesh Synthetics(supra) no longer survives. Alternatively, the adjustment can be justified on the basis of the provisions of section 143(1)(a)(ii) of the Act which lays down that adjustment can be made to the total income in the event of “an incorrect claim, if such incorrect claim is apparent from any information in the return”. The form of return contains clause with regard to amounts disallowable u/s.36 of the Act. The aforesaid view of ours is also supported by a decision rendered by the ITAT, Bengaluru Bench in the case Itek Packz Vs. ITO ITA No.995/Bang/2022, order dated 28.12.2022. In that decision, the Tribunal, after considering the decision rendered in the case of P R Packaging (supra) held following the decision of Cemetile Industries Vs ITO in ITA No.693/Pun/2022, order dated 23.11.2022 that disallowance can be made under section 143(1)(a) of the Act of employees’ share of ESI and PF paid beyond the due date under the relevant law relating to PF contribution and ESI contribution. The Tribunal has placed reliance on the decision of the Hon’ble Madras High Court in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Vs. DCIT (2022) 138 taxmann.com 571. The Hon’ble Madras High Court took the view that while processing a return under section 143(1)(a) of the Act, apparent incorrect claim can be disallowed. We are of the view that the decisions cited by the learned Counsel for the assessee proceed on the assumption that the disallowance of employees’ share of PF and ESI paid beyond the due dates under relevant law has been made only under section 143(1)(a)(iv) of the Act, while in the intimation under section 143(1)(a) of the Act, no such basis has been given and therefore the disallowance can be justified even in terms of section 143(1)(a)(ii) of the Act.

Further the decision of the Cuttack Bench of ITAT in the case of Nirkar Security & Consultancy Services (P) Ltd. in ITA No. 98/2022 dated 17.10.2022 have no bearing on the present issue where the Tribunal observed that as per the assessee in certain months the employee’s contribution to PF & ESI has been paid within the grace period provided in the respective Acts and also in certain cases salary has been paid belatedly, consequently, there was a delay in payment of employees’ contribution to PF & ESI. Hence, the issue was restored by the Tribunal to the file of the AO for re-examination. Further, with regard to the claim of assessee that delayed contribution of PF & ESI in respect of employees’ contribution to be allowed as deduction under Section 27(1) of the Act, the Tribunal did not express any view on this issue. Hence, it can be safely said that the Tribunal has not laid down any ratio decendi on the issue before me in its order. Being so, the order in case of Nirkar Security & Consultancy Services (P) Ltd. have no application to the facts of the present case. Accordingly the issue in dispute is decided against the assessee and in favour of Department.01

In the result, the appeal filed by the assessee is dismissed.

Read the full order from here

delayed-1-1

Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal.

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164 FAQ’s on Employees’ Provident Fund

164 FAQ’s on Employees’ Provident Fund

1. Whether an employer can deduct employer’s share of contribution from the wages of employees?

Answer: No. It is not permissible. Any such deduction is a criminal offence.

2. Can the wages be reduced by the employer on account of payment to the EPF?

Answer: No. It is specifically barred under section-12 of the EPF & MP Act,1952.

3. Whether a daily rated employee or the piece rated employee can become a member of the EPF?

Answer: Yes.

4. If an employee is paid wages on daily basis or on piece rate basis how the contribution is determined?

Answer: The wages paid in a calendar month will be taken to determine the contribution due.

5. Whether the member is entitled for full interest on the belated deposit of PF dues by the employer?

Answer: After realising the dues, the PF members will be given full interest for each due month and it will in no way affect the interest due to members on the contributions paid. The employer shall be charged penal interest under section 7Q and penal damages under section 14B of the Act respectively.

6. An employee is paid subsistence allowance during the period of his suspension. Whether PF contribution is payable on this?

Answer: No.

7. Can an employee contribute to the EPF after leaving the service?

Answer: No. In the absence of wages & Employer no recovery can be affected. Any contribution by the member must be matched with employer’s share of contribution.

8. The contribution has been recovered from the wages of the employee but the employer had not paid to the EPF. What is the remedy?

Answer: The Employees’ PF Organization will invoke penal provisions of the Act to recover the dues from the employer. Complaint can be lodged with Police under section-406/409 of IPC by the EPFO for action against such employers.

9. What will be the effect of non-payment of PF dues by an employer? Or how a member is affected for non-payment of EPF dues by the employer?

Answer: The Provident Fund amount due to the member will be paid only to the extent of the amount realised from the employer.

10. Whether an employer can recover any outstanding dues from the PF amount payable to a member?

Answer: No. It is totally prohibited.

11. What are the measures by which the PF amount is recovered from a defaulting employer?

Answer: Attachment of Bank Accounts, Realisation of dues from Debtors, Attachment & Sale of properties, Arrest and Detention of the Employer, Action under Section 406/409 of Indian Penal Code and Section 110 of Criminal Procedure Code, Prosecution under section 14 of the EPF & MP Act,1952.

12. How a member is informed about the non-payment of contributions recovered from the wages of the employee but not paid to the EPF?

Answer: The Annual P.F. Statement of Account/Member Passbook will indicate the amount paid by the employer. The default period in a year is thus made known to the members. In the current scenario if the member has activated her/his UAN the non-payment/payment of contributions can be verified every month through the e-passbook. Currently, members also receive sms on their registered mobile phones on credit of monthly contribution into their PF account.

13. Whether the P.F. amount credited to the member can be attached against any liability?

Answer: No. The Provident Fund enjoys protection against attachment by any Court also as per the provisions of section 10 of the EPF & MP Act,1952.

14. When an employer becomes insolvent or when a company is wound up, whether the contributions will be paid in priority over other debts?

Answer: Yes.

15. When wages are not collected by the member whether the PF can be deducted or not?

Answer: The employer, before paying the member his wages, is required to deduct the PF contribution from his wages and pay to the Regional PF Commissioner. As such PF can be deducted.

16. Can a member pay contribution in excess of the statutory rate of 12%?

Answer: Yes. The member can pay voluntary contribution in excess of his normal contribution of 12% of Rs.15000/-. The total contribution i.e., voluntary + mandatory can be up to Rs.15000/- per month. (The employer may restrict his own share to the statutory rate). The member can also contribute on higher wages i.e., >15000/- after getting permission from APFC/RPFC as per the provisions of para-26(6) of the Scheme.

17. Can a member demand for showing the recovery of contributions from the employer?

Answer: Yes. The contribution card of each member in Form 3-A/ECR copy can be demanded from the employer.

18. How the contract employees are protected and given their P.F. when the contractor is not paying the dues to the principal employer?

Answer: It is the duty of the principal employer to ensure that the Contractor discharges his liability. The Principal Employer must allow payment of bills after ensuring that the Contractor has enrolled and complied in respect of all eligible contract employees every month. The Principle Employer can check the remittance and employee name by using the Establishment Search option available in our website http://www.epfindia.gov.in. The path is OUR SERVICES >> For Employers >> Important Links >> Establishment Search (Also view Remittances and member name). If the Principal Employer ensures that all contract employees activate their Universal Account Number (UAN), then any default by the contractor can be nipped in the bud.

19. Can a member refuse to part with the payment of contribution to the Pension Fund?

Answer: The Pension contribution is only a diversion from the employer’s share of Provident Fund. Hence no consent is required from the member and refusal does not arise.

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20. Whether an employer can stop paying Employees’ Provident Fund contribution in respect of a member who had attained the age of 55 or 60?

Answer: No. The Employees’ Provident Fund Contribution should be paid till the date of his leaving the service, irrespective of the age of the member. Employees who ceases to be EPS(pension) member will get Employers 8.33% contribution in PF.

21. In case the PF amount is not settled within 20 days to whom the matter is to be reported?

Answer: He can approach the Regional P.F. Commissioner in charge of grievances; file a complaint on the website using the EPFiGMS feature in the section ‘FOR EMPLOYEES’. The url for the grievance page is http://epfigms.gov.in/ or he can appear before the Commissioner in the ‘Nidhi Apke Nikat’ program being conducted on 10th of every month.

22. Is there any time limit for withdrawal of Provident Fund dues?

Answer: Only in the case of resignation from service (not superannuation) a member has to wait for a period of two months for withdrawal of the PF amount.

23. When the employer is not attesting the claim form how to submit the application for withdrawal of provident fund?

Answer: It is the duty of the employer to attest the application form. In case of any dispute, the member may attain attestation preferably from the bank in which he has maintained his account and thereafter submit the same to Regional PF Commissioner, explaining the reasons for not obtaining the signature of the employer. The Regional P.F. Commissioner will pursue the matter with the employer wherever necessary. If the member has activated his Universal Account Number and linked his bank account and Aadhaar then he can submit composite claim (Aadhaar) which only requires the signature of the member.

24. In case of change in employment whether a member can get his PF account transferred?

Answer: On change in employment, the member should necessarily get his PF account transferred to his present establishment, duly submitting Form 13(R). A member can submit claim for transfer online using member interface at unified portal.

25. If past accumulations are not transferred on cancellation of exemption, how the provident fund amount is paid to the members?

Answer: The local RPFC will ensure transfer of securities/cash and arrange for refund of dues to the members.

26. How is a PF member informed of the transfer affected?

Answer: A copy of Transfer Certificate (Annexure-K) issued to the transferee Regional P.F. Commissioner/P.F. Trust giving full details of the transfer can be requested from the EPF office.

27. What is the method of crediting interest to the P.F. subscribers?

Answer: The compound interest is credited on monthly running balance basis at the statutory rate declared for each year. For 2016-17 the interest declared is 8.65%.

28. Whether provident fund provides for any refundable loan for Housing etc.?

Answer: No. But, non-refundable loans for housing are available.

29. I am an employee working in an establishment to which the PF Act is not applicable. Can I become a member of the EPF?

Answer: An employee can become a member only after the application of the Act to the establishment.

30. If an employee is not given the PF membership, to whom he can approach?

Answer: He can approach his employer failing which he can approach the Regional Provident Fund Commissioner of the nearest PF office.

31. Whether the employee working in a Branch Unit of an establishment located outside the state is eligible to become a member of the EPF?

Answer: The Act is applicable to an establishment as a whole. Hence, its employees, irrespective of their place of work or location, are eligible to become member of the Fund.

32. If an employee is working in more than one establishment how his membership is regulated?

Answer: His membership is reckoned separately for each establishment. (Under different Provident Fund Account Numbers/ member Ids)

33. Can an employee become a member of EPF without any age restriction?

Answer: There is no age restriction for becoming a member of the Provident Fund, whereas an employee who has already attained the age of 58 cannot become a member of the Pension Fund.

34. Whether an employee can become a member of the EPF without any restriction to his salary/wages?

Answer: The employees who are drawing the basic wages and dearness allowance up to Rs.15, 000/- are alone eligible to become a member. He will continue to be a member even when his pay exceeds Rs.15, 000/-. However, his contribution to the Fund will be restricted to Rs.15, 000/-. The employer is also required to pay his matching contribution up to Rs.15, 000/-. Employees drawing more than Rs.15000/- can also become a member of EPF by giving option under para 26(6) of the EPF Scheme. The option has to be submitted to the EPF office within 6 months of joining of such member.

35. Whether an apprentice can become a member of the EPF?

Answer: No. But, when he ceases to be an apprentice he should be enrolled immediately.

36. If an employee is drawing more than Rs. 15000/- (Basic + DA only) is he required to become a member of the EPF?

Answer: Such employee is not required to become a member, if he is not already holding the PF membership. Otherwise, if both the employer and employee are willing, he can become a member by giving option under Para-26 (6) of the PF Scheme. The option has to be submitted to the EPF office within 6 months of joining of such member.

37. If an employee is transferred from one establishment to another establishment whether he is required to be enrolled as a member once again?

Answer: He is required to be enrolled as a member under the new establishment, for transferring his Provident Fund from his previous account.

38. If a person is working in an establishment without receiving any wages whether he can be given the PF membership?

Answer: Membership is allowed only where the wages are payable to an employee.

39. Whether an employee can become a member of the Pension Scheme only, without contributing to the PF?

Answer: No. By virtue of membership of Provident Fund only one can become a member of the Pension Scheme. From 01/09/2014 any new employee joining an establishment and drawing basic wage more than Rs.15000/- per month can only become a member of the PF after submitting option as per the provisions of Para 26(6) of the EPF Scheme. However, he can not get the membership to the Pension Fund. Both employee share of 12% and employer share of 12% contribution shall be paid into the Provident Fund only for all such employees.

40. Whether an employee can continue as a PF member even after his retirement?

Answer: Yes. If one continues to work even after attaining the superannuation age.

41. Is there any option available to an employee whether to become a member of the EPF or not?

Answer: No option.

42. Whether an EPF member can discontinue his membership, while in employment?

Answer: Not permissible.

43. Where an establishment is having its own recognized private PF Trust whether an employee can be allowed to continue in the private PF without joining the EPF?

Answer: Employee can be allowed to join the private PF Trust but the Trust has to take exemption from the EPF Scheme. He will however continue to be governed by the Pension and EDLI Schemes. All private trusts must obtain exemption from EPFO to enjoy Income Tax benefits.

44. How long an employee can continue his EPF membership?

Answer:  There is no restriction of period for membership. Even after leaving the establishment a person can continue his membership. However, if no contribution is received into a PF account for 3 consecutive years the account shall not earn any interest after 3 years from the stopping of contribution.

45. How the period of non-employment between two spells of employment is treated under EPF?

Answer: Non employment period is not affecting the EPF but affects the calculation of service to decide the quantum of benefit under the Employees’ Pension Scheme.

46. What will happen for the EPF membership of an employee during the period of closure, lock-out, strike etc.?

Answer: During such period the membership will continue and in the absence of wages no recovery of contribution will be made.

47. Whether an employer can also join the PF?

Answer: No.

48. Whether an employee can continue his EPF membership after leaving the employment?

Answer: Yes.

49. Whether any employee can join the EPF directly?

Answer: No. It is only by way of employment in an establishment covered under the provisions of the EPF & MP Act, 1952.

50. A Security Guard is working for different establishments; under whom he is required to secure membership?

Answer: If the employer of the Security Guard has been brought under the Act, the membership will be given through the employer, irrespective of his place of work.

51. If the establishment is not employing 20 persons, whether an employee can join the EPF?

Answer: Yes. The majority of employees and the employer can voluntarily opt for joining the Scheme as per provisions of Section-1(4) of the Act (Voluntary Coverage).

52. What other benefits are accrued on joining the EPF?

Answer: On joining the EPF, the member is provided the benefits under Pension (restricted to employees with Rs.15000/- or less monthly wage) and Employees’ Deposit Linked Insurance Scheme.

53. Whether an employee already drawing Pension under EPS, 1995 is required to join the PF and Pension Fund?

Answer: He is required to join only the PF and he cannot become a member of the Pension Scheme.

54. An employee who joins an establishment at the age of 58 is eligible to become a member of the Pension Fund?

Answer: No.

55. How long a member can retain his Provident Fund in his account?

Answer: The membership can be retained till the withdrawal of his Provident Fund dues. However, if the account does not receives any contributions for more than 3 years interest won’t be credited to the account after the 3rd year.

56. In the absence of nomination, how the P.F. amount of a deceased member is paid?

Answer: It is payable to the family members in equal shares, under Para 70 (ii) of EPF Scheme, 1952. If there is no eligible family member, it is payable to the person(s) who are legally entitled to it.

57. What is the need for giving nomination for pension?

Answer: On the death of a Pension member (before receiving the pension), if there is no eligible family member, pension is payable to the nominee.

58. In the absence of valid nomination and no family to whom the Pension amount is payable?

Answer: Payable to the dependant parents, (dependant father followed by dependant mother).

59. Whether an unmarried person can nominate somebody from outside?

Answer: Yes. But, on acquiring a ‘Family’ the nomination is treated as invalid and the benefits shall be paid to the spouse and children if any.

60. Whether an employee who has not opted for the earlier Family Pension Scheme, 1971 can join the Pension Scheme?

Answer: Yes.

61. What is the formula for calculating the Pension amount?

Answer: Pension=(Pensionable Salary (average of last 60 months) X Pensionable Service)/70.
Pensionable Service is the period for which contributions have been received.

62. What is the quantum of pension a member can get on his superannuation?

Answer: A member who joins the Employees’ Pension Scheme 1995 at the age of 23 and superannuates at the age of 58, and contributing to the (present) wage ceiling of Rs.15000/- may get about Rs.7500/- as pension if service is 35 years.
(Pensionable Salary X Pensionable Service)/70 = (15000×35)/70 = 7500

63. How the average salary is determined for granting pension?

Answer: The average salary is determined only for giving the pension to member. It is the average of last 60 months. (Non-contributory period, if any, is reduced)

64. What are the advantages of taking a Scheme Certificate?

Answer: 1) It facilitates transfer of Pension Accounts when the employment is changed. 2) If the Holder of Scheme Certificate dies the family will get family pension. 3) It is like a Policy for Pension without paying the premium.

65. In case of death of a member, who was an Ex-serviceman whether family pension is payable or not?

Answer: Family pension is payable i.e. in addition to the Military Pension, i.e. family pension under Rule 54 of the CCS (Pension) Rules, 1972. (Effective from 27-07-2001 only)

66. Can a member seek exemption from the Pension Scheme?

Answer: Individual member cannot seek exemption from the Pension Scheme. Only an establishment can seek exemption.

67. At what age a member is eligible for pension?

Answer: A member is eligible for pension on superannuation at the age of 58 years. If a member leaves employment between 50 and 57 years he can avail the early (reduced) pension.

68. What is the service required for giving pension in case of death of the member?

Answer: The minimum service of 10 contributory years is only for payment of pension to a member. It is not applicable, where a member dies. In case of death of a member, The family pension and child pension is payable even after receiving one month’s contribution (including part of the month) for Pension Fund.

69. If a member dies to whom the pension is payable?

Answer: On death of the member the Pension is automatically payable to the spouse (Widow/Widower). In addition, the children are also eligible till attainment of 25 years of age (2 at a time). Any disabled child in the family shall get disabled pension for life apart from the two child pensions.

70. In case the employer has failed to pay the pension contribution whether any pension is payable or not?

Answer: Non-payment of pension contribution by an employer will not affect the grant of Pension. Pension is guaranteed.

71. Can a pensioner get pension anywhere in the country?

Answer: Yes.

72. How the pension of a member who works for different establishment is determined?

Answer: The wages and the service of the member are consolidated to determine the Pension.

73. Is there any increase in the pension amount every year?

Answer: There is a provision for valuation of the pension fund and review of the rates of contributions and quantum of the pension and other benefits in para 32 of the Employees’ Pension Scheme, 1995.

74. When a member avails reduced pension at the age of 50 can he get his full pension on attaining 58 years?

Answer: No. Once Pension is sanctioned it cannot be altered.

75. What are the criteria for determining the date of eligibility for early pension (Before 58) ?

Answer: The member is required to indicate his option regarding the date from which he requires early pension in the application form. If no date is given in the claim form then the date of application shall be taken as the opted date.

76. Can a member avail pension even while he is in service?

Answer: The member who continues in service even after 58 years can avail the Pension from the age of 58. If a pensioner, who has availed the early pension, may take up employment thereafter and in such cases he will not be eligible to join the Pension Scheme. And the 8.33% contribution from Employer side will go towards EPF fund.

77. Can I surrender or sell my full pension for getting a lump sum payment?

Answer: No.

78. Is it compulsory to withdraw the pension benefit along with the P.F. amount?

Answer: No. A member can withdraw his PF amount (member share only) and maintain a lien in the Pension Scheme by availing a Scheme Certificate.

79. Can I change my Date of Birth/Age?

Answer: Yes. Date of Birth/Age once given is not normally changed, however it can be changed with proper documentary evidence. A copy of the circular dated 02/12/2013 in this regard is available on our website. The path is OUR SERVICES >> For Employers >> Downloads >> Process for Change in Name & Basic Details of Members. A joint request has to be submitted by the employee and employer to the concerned EPF office along with documents like Aadhaar, PAN etc.

80. Can a married daughter be excluded from receiving the family pension?

Answer: The marital status has no relevance if the children are below 25 years; they are eligible for family pension in the event of demise of the member.

81. If a member is having two wives to whom the family pension is payable?

Answer: If the second marriage is legally valid, it is payable to the eldest with reference to the date of marriage and on her death, payable to the next surviving widow.

82. In the absence of family member whether a pensioner can nominate any other person to receive family pension?

Answer: No. In the absence of family member on the date of the death of the member (before eligibility for member pension), the family pension is payable to nominee and in the absence of a valid nomination it is payable to depandent father followed by dependant mother. Once the pension is received by the member there is no validity for nomination. A pensioner cannot nominate any person.

83. What will be the effect of unemployment period under the Pension Scheme?

Answer: The unemployment period will be excluded from the actual service. Pension is based on contributory service only.

84. Is it possible to exclude my spouse from receiving the family pension?

Answer: No. The spouse is an automatic beneficiary unless he/she is legally divorced. However, a lady can keep her husband out from her family and deny him family pension by submitting a request in this regard in writing to the Commissioner.

85. In the absence of family members (family here means the family procreated by the member and not the family in which he/she was born) and nominee, to whom the pension is payable?

Answer: It is payable to the dependant parents.

86. Who is eligible for disablement pension?

Answer: Any Pension member irrespective of age and service who is declared as disabled (with 100% disability with respect to employability) certified by the designated Hospital and where the member had left service only on account of his disablement is eligible for disablement pension.

87. Why a pensioner’s widow gets lesser pension when compared to non-pensioner’s widow?

Answer: The pension and family pension under Employees’ Pension Scheme, 1995 are the Social Security benefits. It is viewed as a need based benefit. It is not related to the quantum of contribution paid by a member. A pensioner after attaining the age of 58 years is to take care of his spouse and in his absence the liability is restricted to one person. Hence 50% of the pension is payable. Whereas in the case of a member (non-pensioner) who dies leaving behind his spouse, children who are yet to complete their education, marriage etc. and also considering the pre-mature death of a member the quantum of pension payable to non-pensioner’s widow is on the higher side.

88. Whether family pension is payable to a widow who was married to a pensioner? (After his superannuation)

Answer: The widow of a pensioner is eligible for family pension (irrespective of the date of marriage whether prior to his superannuation or thereafter)

89. In case the widow or widower remarries, to whom the family pension is payable?

Answer: The pension payable to the widow/widower will be stopped and thereafter the children pension will be converted to orphan pension (75% of the widow pension).

90. What is the period up to which pension is payable to the widow or widower?

Answer: Pension is paid till the remarriage of the widow/widower or till death.

91. When a member is having children through his first and second wife, how the eligibility for children pension is determined?

Answer: The children of both first and second wife should be arranged in the order of their date of birth and then the children pension is allowed to the eldest two children but below 25 years of age.

92. Is it necessary to open a separate bank account to draw the child pension?

Answer: Yes.

93. Can the widow and children draw pension in different places/banks?

Answer: No. The pension should be drawn by widow and children in the same bank and branch.

94. Who is eligible to get a Scheme Certificate?

Answer: A member whose service is 10 years or more and not attained the age of 58 years will be mandatorily issued scheme certificate. A member whose service is less than 10 years can avail the Scheme Certificate to carry forward his pension service but it is not mandatory.

95. Whether a member/family member can avail more than one pension for one service under the Employees’ Pension Scheme, 1995?

Answer: No.

96. When and to whom the pensioner is to give a life and non-remarriage certificate?

Answer: All pensioners drawing pension under Employees’ Pension Scheme, 1995 are required to give a Life/Non-Remarriage Certificate, duly attested by the Bank Manager/Gazetted Officer in the month of November each year. To be submitted to the Bank through which the pension is being paid. Failure to submit will result in stoppage of pension from the month of January. Currently, digital life certificate has been introduced from 2015-16. Pensioners can use their Aadhaar number to obtain the DLC. The facility is available in banks as well as PF offices.

97. Whether a Scheme Certificate holder with a service period of 8 years can avail the withdrawal benefit on surrender of Scheme Certificate?

Answer: No. Only on attaining 58 years he can surrender either to avail the Pension (if eligible) or withdrawal benefit.

98. Whether the Orphan Children are eligible for double Orphan Pension where both the parents were making contributions under Employees’ Pension Scheme, 1995?

Answer: Yes. The benefit under the Pension Scheme is a direct consequence of the contributions paid by the member of EPS, 1995; hence, if both parents were members and have contributed independently to the said Scheme, the Orphan will be eligible to two pensions separately. The normal ceiling as provided for in the Employees’ Pension Scheme shall however, continue to apply.

99. Whether Withdrawal Benefit will be payable to a member in case of defaulting establishment?

Answer: In respect of an establishment defaulting in remitting contribution to the Employees’ Pension Fund 1995 for any period, withdrawal benefit will not be paid to the member in respect of the default period. The member is entitled to withdrawal benefits only in respect of the period for which the contributions are received.

100. Whether member can delay the pension beyond 58 years?

Answer: Yes, the member has option to delay the pension beyond 58 years: 1) Member can opt for receiving pension after attaining 59 or 60 years of age but pension contribution stops after 58 years. In this scenario quantum of pension is increase by 4% per year beyond 58 years. 2) Member can opt for receiving pension after attaining 59 or 60 years of age but pension contribution continues after 58 years. In such a scenario the quantum of pension shall be higher than the first case cited above.

101. Whether Assurance benefit under EDLI Scheme is payable for death occurring after leaving the service?

Answer: No. Admissible only in case of death while in service.

102. To whom the EDLI benefit is payable?

Answer: EDLI benefit is payable to the persons eligible to receive the EPF dues.

103. Whether Assurance Benefit is payable to missing EPF member?

Answer: Payment of Assurance Benefit under EDLI Scheme 1976 is only available on the member’s death while in service to the nominees/legal heirs.

104. What is the maximum quantum of Assurance benefit?

Answer: Currently, the maximum assurance benefit is Rs.600,000/-.

105. Can a member withdraw the entire amount through money order?

Answer: No.

106. Whether pension can be paid by money order or cheque?

Answer: Pension is payable through the designated banks notified for each region through CBS.

107. What is the Universal Account Number?

Answer: Universal Account Number (UAN) is a 12 digit number allotted to each subscriber by linking it to the member’s currently active PF account number (from 31/07/2014 to 30/11/2016). From 12/2016 any new member has to be allotted a Universal Account Number linked to the establishment’s code number.

108. Who allots the Universal Account Number?

Answer: The number is allotted by EPFO on the request of the Employer and populated in the Employer’s login in the unified portal http://www.unifiedportal-emp.epfindia.gov.in. The UAN can also be generated by any individual using his/her aadhaar if his UAN is not already generated.

109. What are the advantages of having a UAN?

Answer: Once the member has activated his/her UAN on the unified portal he can enjoy the following benefits: Download/Print your Updated Passbook anytime. Download/ Print your UAN Card. List all your Member IDs to UAN. File online transfer claim on OTCP Update your KYC information.

110. How can I know the status of my UAN?

Answer: The facility is available in the unified portal at https://unifiedportal-mem.epfindia.gov.in.

111. How can I know the balance in my PF account?

Answer: Please activate your UAN and check/download your passbook.

112. How can I know the status of my application for PF settlement, advance or transfer submitted to the EPF office?

Answer: Please use the url https://passbook.epfindia.gov.in/MemClaimStatusUAN/ for checking your claim status.

113. Whether a PF member can submit claims for settlement without attestation of the Employer?

Answer: Currently the member can submit 3 types of claims without attestation of Employer namely, Form-19, 10C and 31. However, the member must ensure that his UAN is activated and at least the bank account and Aadhaar KYC’s in respect of his account are approved by the Employer using his Digital Signature Certificate.

114. What is the Composite Claim Form?

Answer: EPFO has launched a consolidation of the settlement claim forms. Accordingly one composite claim form (Aadhaar & Non Aadhaar) has been issued to replace the existing claim forms no.19, 10C and 31 and UAN forms no.19, 10C & 31. Another composite form replaces the existing Form no.20, 10D & 5-IF.

115. I want to know more about Employees’ Provident Fund Organisation.

Answer: Please visit EPFO Website: http://www.epfindia.gov.in

116. Who can be member of EPFO?

Answer: A person who is employed for wages in any kind of work, manual or otherwise, in or in, connection with the work of a establishment covered under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the establishment.

116. Who can be member of EPFO?

Answer: A person who is employed for wages in any kind of work, manual or otherwise, in or in, connection with the work of a establishment covered under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the establishment.

117. Who can be a member?

Answer: An employee of a covered establishment, if not excluded, is compulsorily a member of the employees’ Provident Funds Scheme. The employer of the establishment himself makes the employee a member by following prescribed procedure. An excluded employee is an employee whose pay at the time of being a member exceeds Rs. 15,000/- per month

118. Can a member contribute at a higher rate (above 12%) on voluntary basis?

Answer: Yes

119. What is contribution rate payable for a member?

Answer: At present, an employee contributes 12% of the Basic wages + Dearness allowance + Retaining allowance in EPF. The employer also pays 12% of pay out of which 8.33% of pay is diverted to Pension Fund and the rest 3.67% is diverted to EPF.

120. Does a member contribute to employees’ Pension Scheme and employees’ Deposit-Linked Insurance Fund Scheme (EDLI)?

Answer: No. The employer pays 12% out of which 8.33% is diverted to Pension Fund. An employer also pays 0.5% of Pay in EDLI Scheme.

121. What are benefits available to EPF members?

Answer:

A. Advances: A member can take non-refundable advances during service period for various purposes:-

  • Treatment of illnesses of self/family: TB, leprosy, paralysis, cancer, mental derangement heart ailment or major surgical operation
  • Marriage of self, daughter, son, brother & sister.
  • Post-matriculation education of son/daughter
  • Withdrawal for purchase of house, flat, dwelling house, addition/alteration of house and repayment of loan for the purpose.

B. Withdrawal within one year before retirement: Upto 90% of total PF balance.

C. Advance on unemployment:

  • Upto 75% of total PF balance.
  • Other purposes (for details please see table below)

D. Final settlement:

  • On retirement or two months after ceasing to be an employee.
  • Pension after retirement subject to the eligibility
  • Insurance in case of death while in service.

122. What are the different types of non-refundable advances?

Answer:

S.N.Para of EPF Scheme 1952PurposeEligibilityAmount admissible
1.62Financingof Member’sLife Insurance PoliciesA policy in the name of the member.
Policyshouldbe legally assigned to CBT (EPF).		Employees’ share should have sufficient balance to pay the premium.
2.68-B, 68-BC,68- BDPurchaseof House/flat, including acquisition of land.Five years membership of the Fund. Employees’shareis more than Rs 1,000/-Twenty four months wages & DA or total balance in PF account(Employees’ +Employer) or total cost, whichever is less. After five years another part withdrawal equal to 12 months wages & DA or employees’ share for addition/alteration. After ten years from the original sanction, another part withdrawal equal to 12 months wages & DA or employees’ share for addition/alteration.
3.68-BBRepayment of housing loan.Loan should have been taken from notified agencies. 10 years membership of Fund. employees’ share in PF account should be more than Rs 1,000/-Thirty six months wages & DA or total balance in PF account (employees’ + employer share) or total outstanding loan & interest thereon, whichever is less
4.68-BCPurchaseof House/flat, including acquisition of land.Five years membership of the Fund. employees’shareis more than Rs 25,000/-Total balance in PF account officememberorcostof acquisition,whicheveris less.
5.68-BDPurchaseof House/flat, including acquisition of land.Threeyears membershipofthe Fund. Member of a registered Cooperative Society.90% of PF accumulation (both shares) or cost payable, whichever is less.
Employees’shareis more than Rs 25,000/-
S.N.Para of EPF Scheme 1952PurposeEligibility                                         Amount admissible
1.68-HIfestablishment / factory is closed/locked downEmployee receives no compensation or has not got wages for two months or more.Upto 100% of employees’ share.
2.68HHIf the employee remains unemployed for more than one monthUnemployment should be more than one monthUpto75%oftotalPF balance.
3.68-JIllnessof self and familyHospitalization for more than one month, major illnesses or major surgery.Basic Wages & DA for six months or employees’ share, whichever is less.
4.68-KMarriage (self ,children ,brother & sister) or post matriculation education of childrenSevenyears’ membership of fund. employees’ share in PF balance is more than Rs 1,000/- Only three withdrawals allowed.50% of employees’ share.
5.68-LNatural calamityNatural calamity declaration by State Government & proof of damage to property.Employees’shareorRs 5,000/-, whichever is least.
6.68-MCut in electricity in factory/establishmentCut in electricity supplied by State Government.Wages for a month or Rs 300/- or employees’ share, whichever is less.
7.68-NPhysically handicapped members for purchaseof equipmentOn account of physical handicap.Basic Wages & DA for six months or employees’ share or cost of equipment, whichever is less.
8.68-NNWithdrawal one year before retirement.Age of member is 54 years and above90% of total PF balance
9.68-NNNForinvestmentin VarishtaPension Bima Yojana.Age of member is 55 years and above90% of total PF balance.

123. What are the documents required to be submitted for availing above advances?

Answer: No document is required to be submitted.

124. What are the other facilities available for the member?

Answer:

Member portal: EPFO provides UAN based online account of member data on EPF website secured with login password.

Passbook: for updated balance

Online claim filing: A member can file online EPF claims for various benefits through member portal if the EPF account is seeded with Aadhar, PAN & Bank account.

Online filing of transfer claim from previous account to new EPF account in case of job change from one covered EPF establishment to another EPF Covered establishment.

Modified Declaration form (Form No-11) for automatic transfer of Funds: Member can effect transfer of EPF Fund from previous account to new account without transfer claim if both account is linked with UAN and Aadhar seeded.

125. Which forms to be filled for claiming benefits?

Answer:

  • For Final settlement/Withdrawal benefits/Advances: Composite Claim form (Aadhar/non-Aadhar)
  • Scheme certificate: Form 10C
  • For pension: Form 10D
  • For transfer of previous account balance to new account: Form 13
  • For nomination of family members: Form 2
  • Declaration of previous service: form 11

126. How to submit claim form?

Answer:

A. Online: If PF account is seeded with Aadhaar, PAN and Bank account is updated. Only Composite Claim Form (Aadhaar) for PF final withdrawal, Pension withdrawal benefits and PF non-refundable advances can be filed online.

B. Offline: All type of claims.

127. How to Update Bank account?

Answer: A member can update his bank account through member portal which is then approved by employer.

128. How much time is taken to settle claim?

Answer: As per EPF Scheme, a claim is required to be settled within 20 days.

129. How do I get my grievances redressed?

Answer: A member can approach the concerned Regional P.F. Commissioner. A member can also file a complaint online at the following link: http://www.epfigms.gov.in

130. What is KYC?

Answer: KYC (Know Your Customer) is member’s data updation to improve the services of EPFO for members. These KYC details include PAN, Aadhaar and Bank Account details. If you have not yet updated these details on the EPFO Member Portal, you may do it now.

131. How can I update KYC?

Answer: Member can update KYC details online in EPFO’s UAN Portal.

132. What are the benefits of KYC?

Answer: Claim can be submitted through online mode without attestation of the employer. A member can view his monthly contribution statement by logging on UAN portal.

133. What are KYC documents that can be submitted?

Answer: Following documents are considered for KYC –

  • National Population Register
  • AADHAR
  • Permanent Account Number (PAN)
  • Bank Account Number
  • Passport
  • Driving License
  • Election Card
  • Ration Card

134. How do I apply for correction in KYC/members’ details?

Answer: In order to update or change in KYC (Know your customer) detail on UAN EPFO portal, a member requires UAN (Universal Account Number). Member can login to EPFO UAN portal and update KYC by uploading necessary documents online. Online request for correction in name, date of birth and gender has been introduced.

135. What is UAN?

Answer: UAN (Universal Account Number) is a unique 12 digit number allotted to a member. It is a permanent number and remains valid throughout the life of a member. It does not change with the change of employment. UAN helps in automatic transfer of Funds and PF withdrawals.

136.  Who can generate UAN and How I can get my UAN?

Answer: Your Employer can generate the UAN. In case of change in employment, the previously allotted UAN may be provided to the employer.

137. How Aadhaar is seeded with UAN?

Answer: Member can seed his Aadhar through Member portal, after UAN is activated by employer.

138. How PAN is seeded with UAN?

Answer: Member can seed his PAN through Member portal, after UAN is activated by employer.

139. How bank account is seeded with UAN ?

Answer: Member can seed his Aadhar through Member portal, approved by employer.

140. What are the benefits of Aadhaar, PAN &Bank accounts details seeded with UAN ?

Answer:

  • Member can submit claims through online mode
  • Member can file claim directly without employer’s signature.

141. What is an Inoperative Account?

Answer: An account is classified as Inoperative account in which contribution has not been received for 3 years after retirement or permanent migration abroad or in case of death. At present, all accounts will earn interest upto 58 years age of a member.

142. Will my inoperative account earn interest?

Answer: No. However, at present, all accounts will earn interest upto 58 years age of a member.

143. What should I do if my account becomes inoperative?

Answer: If you are still working in an establishment covered under EPF & MP Act, 1952, you should get the amount transferred into your new account either by online or offline mode. If you have retired then you may withdraw the amount.

144. Will my withdrawal be subject to deduction of income tax (TDS)?

Answer: In case a member withdraws his EPF and has rendered less than 5 years of service and accumulated amount is more than Rs. 50,000/, TDS shall be applicable on the following rates:-

Submission of PANNon submission of PANNo TDS deducted in case of
If 15G/15H is submitted, no TDS is deducted
If 15G/15H is not submitted,TDS deducted at 10%		TDS is deducted at Maximum Marginal Rate (34.606%)Transfer of Fund
Payment of advance
Service is terminated by employer beyond control of employee

145. Will tax be deducted at source (TDS) if my service is more than 5 year (60 months)

Answer: No. The service rendered at previous as well as present employer would be added to arrive at total service.

146. What is the benefit of providing PAN?

Answer: If a member provides/link PAN and the PF balance is more than Rs. 50,000/ and service rendered is less than 5 years, then tax (TDS) would be deducted @10% and not

147. What is Form 15G/15H?

Answer: Form 15G and Form 15H are declarations which can be submitted to receive payments without deduction of tax in case of members having total annual income of Rs. 2.50 lacs and Rs 3.00 lacs respectively. Form 15H is applicable for Senior Citizens (60 years or older) whereas Form-15G is for everybody else. Also, a member must have a PAN before applying in these forms.

148. How many copies of 15G/15H have to be submitted?

Answer: Two copies of form 15G/15H, whichever is applicable, are to be submitted with the claim forms.

149. How to file Nomination form for EPF?

Answer: Form No-2 is prescribed under Employees Provident Fund, employees’ Pension Scheme and Employee’s Deposit Link Insurance Scheme for submitting family and nomination details.

150. What are benefits of submitting Form No-2?

Answer: In case of a member’s death, the family can get the benefit PF/Pension/Insurance without any delay.

151. How do I fill Form No-2?

Answer: Member can submit Form No.-2 online through the employer. E-sign facility has also been extended to the members to submit Form No.-2 online. In case, new family member is added, the EPF member should fill Form No- 2 to update the details in EPFO. Form No.-2 can be submitted online as well as offline mode.

152. What if my employer is not available to sign the claim form or the establishment has closed down?

Answer: In such a scenario, the claim form may be attested by the Manager of the Bank in which your savings Bank Account is currently maintained.

153. Am I required to affix revenue stamp of Re 1/- on the claim forms?

Answer: No.

154. Is it compulsory to enclose cancelled original cheque with the claim form?

Answer: Yes. A cancelled original cheque bearing name of the member, his bank account number and IFS Code of the bank should be printed on the cheque itself.In case, members’s bank account is ‘without cheque-book’ facility, then copy of first page of passbook duly attested by the employer or the bank manager may be enclosed with the claim form.

155. What is Composite Claim Form (Non-Aadhaar)?

Answer: Composite Claim Form (Non-Aadhaar) is a single page form for settlement of PF final withdrawal, pension withdrawal benefits and PF non-refundable advances. The claim is required to be submitted offline and attested by the employer.

156. What is Composite Claim Form (Aadhaar)?

Answer: Composite Claim Form (Aadhaar) is a single page form for settlement of PF final withdrawal, pension withdrawal benefits and PF non-refundable advances. It can be submitted both in online as well as offline mode and does not require the attestation of the employer. This form is applicable in cases where employees’ complete details in Form No-11 (New), Aadhaar number and Bank Account details are available on UAN Portal and UAN has been activated.

157. Are the payments made through NEFT (National Electronic Funds Transfer)?

Answer: All payments are made electronically through NEFT or CBS (Core-Banking Solutions).

158. What does Commutation of Pension mean ?

Answer: Commutation of Pension means payment of lump sum amount in lieu of a portion of pension surrendered voluntarily by the pensioner

159. What is Employees’ Pension (Amendment) Scheme 2020?

Answer: In the Employees’ Pension Scheme 1995, after paragraph 12, the following paragraph has been inserted which is thereby called Employees’ Pension (Amendment) Scheme 2020: “12B. Restoration to normal pension in cases of grant of commutation – The normal pension in respect of those members who availed the benefits of commutation of pension under the erstwhile paragraph 12 A of this Scheme on or before the 25th day of September 2008 shall be restored after completion of fifteen years of the date of such commutation.”

160. Who can avail the benefits of restoration to normal pension in cases of grant of commutation?

Answer: Those members who availed the benefits of commutation of pension under the erstwhile paragraph 12 A of this Scheme on or before the 25th day of September 2008 shall be restored after completion of fifteen years of the date of such commutation.

161. What changes does the new Gazette Notification No.132 (E) on restoration of commutation contain?

Answer: The relevant provision in Para 12A entitled the pensioner to commute 1/3rd pension & thereafter his entitlement was to get balance 2/3rd pension. The scheme did not have any provision for restoration of the original pension of the pensioner once the pension has been commuted. However, According to the government notification G.S.R No. 132(E) dated 20.02.2020 introduced Para 12B allowing restoration of original pension after 15 years.

162. When pensioners who opted for commutation will receive their full pension?

Answer: The Pensioners would receive their full pension after completion of fifteen years from the date of commutation.

163. Has there been any educational programme conducted for pensioners?

Answer: Yes. EPFO is conducting webinars through its Regional Offices and Pensioners may request the concerned Office for participation to resolve any querry.

164. Explain about the scheme of EPFO to settle claims on the day of retirement / superannuation.

Answer: EPFO has launched a scheme called ‘Prayaas- an endeavour to release Pension on the day of Superannuation’ for members of Employees Pension Scheme 1995. Members superannuating within 03 months are guided to submit Pension claims one month before the day of retirement so that Pension Claims of these employees can be settled for issuance of PPOs on the Date of retirement.

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EPFO settles 94.41 lakh claims of Rs 35,445 crore during COVID19 each in 3 days

EPFO settles 94.41 lakh claims of Rs 35,445 crore during COVID19 each in 3 days

Despite the COVID-19 pandemic restrictions, EPFO has been able to settle a staggering 94.41 lakh claims thereby disbursing about Rs 35,445  crore to its  members during the period of April-August, 2020.

Online Steps to withdraw 75% of Employer Provident Fund as directed by Govt in outbreak COVID-19 – FAQ

During this period, EPFO has settled around 32% more claims as compared to corresponding period of last year (April-August, 2019) while the amount disbursed increased by around 13%.

To help its members tide over the liquidity needs during this crisis, EPFO fast tracked settling of COVID-19 advances and illness related claims. It introduced auto mode of settlement for these two categories of advances. Auto mode of settlement reduced the claim settlement cycle to just 3 days for most claims in these two categories against the statutory requirement to settle claims within 20 days.

Notably, 55% of advance claims settled during April-August 2020 were related to the recently  introduced  Covid-19  advance while around 31% of advances settled during the period pertained to illness claims.

Wage-wise analysis highlights that almost 75% of COVID-19 advances and roughly 79% of illness related claims were settled for PF subscribers belonging to wage slab of  less  than  Rs.15,000. 

Timely availability of PF advances prevented many low wage earners from falling into debt, providing  social security support to the weakest section of workforce during these adverse times.

Partial withdrawal claims or advances under EPF scheme have more than doubled, with data reflecting about 212% growth for the period April-August 2020 as compared with April-August 2019.

While there was an increase in the number of advance claims, there was  a significant  decline of  about   35% in the number of final PF settlement claims from April-August 2020 period as compared with April- August 2019. Final PF Settlement claim allows members to withdraw  their  PF balance after  quitting their job, superannuation, termination or at the time of retirement.

With EPFO settling advance claims within 3 days, PF accumulations are now seen as liquid assets  that  can timely meet the need of the subscribers during crisis. Consequently, members have shown greater trust in EPFO by not opting for final withdrawal or closure of account instead choosing to apply for PF advances to meet their financial needs.

This trend of decline in final settlement of claims and rise in advance claims, also needs to be seen in the light of persistent outreach programs of EPFO through print and digital media as  well  as  organizing around 4880 webinars during the pandemic.

This has been coupled with excellence in services through automated claim settlement, auto-transfer of funds on change of jobs, introduction of multi-location claim settlement, regular updation of KYC of members, facility of filing claims through Umang App and robust grievance redressal mechanism.

Through these game-changing initiatives, EPFO has been able  to serve the needs of its subscribers and thus steadfastly standing with them during this critical period.  

To lessen the socio-economic impact of the pandemic, EPFO is committed to help its more than 6 crore subscribers, 66 lakh pensioners and 12 lakh employers through constant innovation and dedication to achieve excellence in service delivery.

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Online Steps to withdraw 75% of Employer Provident Fund as directed by Govt in outbreak COVID-19 – FAQ

The Government has inserting Sub-Para (3) under Para 68L of the EPF Scheme, 1952 to provide for non-refundable advance to EPF members
in the event of outbreak of pandemic CVOID-19

FAQ on withdrawal of EPF – CVOID-19

1) How Much one can withdraw from EPF in pandemic CVOID-19

EPF members not exceeding the basic wages and dearness allowances for three months or upto 75% of the amount standing to member’s credit in the EPF account in the event of outbreak of pandemic CVOID-19

The COVID-19 has been declared a Pandemic by appropriate Government for the entire country and therefore the employees working in Establishments and factories across entire India, who are members of the EPF Scheme, 1952, are eligible for the benefits of non-refundable advance under the sub-para (3) of Para 68L which has come into force from today (28.03.2020)

The eligible Amount will be upto 75% of PF balance (Employee share and Employer Share) or 3 months PF wages or the claimed amount by the member whichever is the least.

2) What is prerequisite to apply online in EFP Govt portal?

There are 3 requirements, UAN should be activated, Verified Aadhaar should be linked with UAN and Bank Account with IFSC code should be seeded with UAN

3) How to file online advance claim for the purpose “Outbreak of pandemic (COVID-19)”

  1. Login to Member Interface of Unified Portal (https://unifiedportalmem.epfindia.gov.in/memberinterface)
  2. Go to Online Services>>Claim(Form-31,19,10C & 10D)
  3. Enter last 4 digits of your Bank Account and verify
  4. Click on “Proceed For Online Claim”
  5. Select PF Advance (Form 31) from the drop down
  6. Select purpose as “Outbreak of pandemic (COVID-19)” from the drop down
  7. Enter amount required and Upload scanned copy of cheque and enter your address
  8. Click on “Get Aadhaar OTP”
  9. Enter the OTP received on Aadhaar linked mobile.
  10. Claim is submitted
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4) Can you file claim through my mobile phone?

Yes, from your mobile phone you can either
i) login to (https://unifiedportal-mem.epfindia.gov.in/memberinterface) and follow steps as above in question 3
ii) Through UMANG (Unified Mobile Application for New-age Governance) Mobile APP Home> EPFO> Employee Centric Services> Raise Claim> Login with your UAN and OTP received on your mobile number registered with UAN to file claim

5) Who is eligible for the advance from EPF to fight COVID-19 Pandemic?

Any member of EPF Scheme, 1952 with UAN (Universal account number) employed in any establishment or factory covered under EPF & MP Act, 1952.

6) How can you know whether establishment/factory in which you are employed is in an area declared to be affected by COVID-19 pandemic?

Since COVID-19 has been declared a Pandemic by the Appropriate Government for the entire country and therefore the employees working in establishments and factories across entire India, who are members of the EPF Scheme, 1952, are eligible

7) Is EPF member required to produce any certificate or document for availing this advance?

No certificate or documents are to be submitted by member or his/her employer for availing the benefit.

8) How much money can you get from your EPF account under this new provision to fight COVID-19 and do you have to refund it?

You can get non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75% of the amount standing to your credit in the EPF account, whichever is less. Since withdrawal is non-refundable, there is no requirement to refund the amount.

9) Please illustrate the calculation of benefits

If the balance in member’s EPF account as on date is Rs.50,000/- and monthly basic wage and dearness allowance is Rs.15,000/-
75% of balance of Rs.50000/- is Rs.37,500/- & amount of three months wage is Rs.45000/-. So member is eligible to get Rs.37,500/- the least of two amounts.

10) What is Tax Implication on the withdrawl?

The CBDT has not came out with guidelines, However from source based information it seems it would be exempted and notification for same will be issued

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Updated Addition FAQ 06 April 2020

Q11) Can an employee working in an exempted establishment get the advance to fight COVID-19 pandemic from PF Trust?

Ans: The “Terms and conditions of exemption” in Para 27AA of EPF Scheme, 1952, provides that any amendment to EPF Scheme, 1952, which is more beneficial to the employees becomes applicable to exempted establishments pending formal amendment of Trust Rules. So, employee of an exempted establishment can withdraw from his PF account maintained with the PF Trust of the establishment by making application to the PF Trust

Q12) I availed advance recently for illness. Can I avail advance to fight COVID-19 pandemic?

Ans: Yes. This advance can be availed irrespective of advances availed earlier.

Q.13) What is income tax rate for advance to fight COVID-19 pandemic?

Ans: Income Tax is not applicable on any advance availed under EPF Scheme.

Q.14: I have already applied advance for a different purpose and requested a lower amount. I do not want to avail this advance now and would like to prefer claim for advance to fight COVID-19 pandemic. However, it is not permitted by the portal. What should I do?

Ans: To enable submission of fresh claim for availing this advance, the earlier claim under submission needs rejection. Please send request on email of your jurisdictional Regional Office for rejection of earlier form 31 submitted.

Q.15: How long will it take for credit of amount in my bank account after submission of claim for advance to fight COVID-19 pandemic?

Ans: Claims for advance to fight COVID-19 pandemic are being processed on priority considering exigency of the situation.

Q16: KYC is not complete for my EPF account and hence I am unable to file this claim.

Ans: The claim for this advance can be filed Online if your UAN is validated with Aadhaar and KYC of Bank account and Mobile number is seeded in UAN. You are requested to complete your KYC by submitting same on Member Portal. If your basic details that is name, date of birth and gender against UAN are same as that in Aadhar, you can link your Aadhar through eKYC Portal. In case of mis-match in KYC details and details in EPF account, please submit online request for demographic detail correction through your employer. The bank account details has to be digitally approved by the employer. For submitting your claim online our aadhar linked mobile will get OTP. So your aadhar should be linked with a mobile

Q17: Is it necessary to apply for 75% of PF balance under this provision?

Ans: Withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75% of the amount standing to your credit in the EPF account, whichever is less, is maximum permissible limit. You can apply for lesser amount also.

Q18: I have applied for availing advance under ‘Natural Calamity’ purpose. Will this be treated as advance to fight COVID-19 pandemic?

Ans: No. You have to apply specifically for advance to fight COVID-19 pandemic.

Q19: Will EPFO process advance to fight COVID-19 pandemic despite lockdown?

Ans: Yes. Advance to fight COVID-19 pandemic are being settled on priority to mitigate hardship faced by members.

Q.20: I have not left my job. Can I withdraw PF to fight COVID-19?

Ans: Yes. You can avail this advance while still in service.

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