The Employees Provident

Funds and Miscellaneous

Provisions Act, 1952
 OBJECTIVE
 A PF Act is created with a purpose of providing financial

security and stability to elderly people.

 It‟s purpose is to help employees save a fraction of their

salary every month, to be used in an event that the

employee is temporarily or no longer fit to work or at
retirement.
 EPFO is one of the largest society security organization in

the world in terms of members and volume of financial

transactions undertaken.
 EPFO is a statutory body of the Indian govt. under labor

& employment ministry.

 Introduction

• PF and ESI coming under Social Security Act and these

are mandatory for all Organisations, where 10 for ESI and 20
for PF employees are working.

• It is implemented by the “Employees Providend Fund

Organisation (EPFO) of India.

• The Employees Provident Funds Act 1952 is compulsory

contributory fund for the future of an employee after retirement or
for his dependents in case of his early death.
 Applicability
 Every Factories or Establishments employing 2 0 ( T w e n t y ) o r
m o r e p e r s o n s from the date of its setup are covered under the Act,
under Sec -1(3). Cinema Theatres employing 05 (Five) or more persons are
covered under the Act.

 Government of India after giving 02 Months notice may apply the provisions
of this Act to Establishments where less than 20 persons are employed.

 Establishments to which this Act “Once Applies” shall continue to be

Governed by this Act notwithstanding that the number of persons employed
therein at any time falls below then 20 (Twenty) person.

 The Current Wages Ceiling Limit for coverage under the Act is ₹: 15,000/-
(Basic + DA) p/m month w.e.f: Sep’ 2014, (Earlier it was ₹ : 6,500/- w. e. f.:
June, 2001, & before that it was ₹ : 5000/- p/m)
ELIGIBILITY AND ENTITLEMENT
• Every employee employed directly/through a contractor who is in receipt of wages are
eligible of become the member of this fund (exception- apprentice under the apprentice
act and casual worker)

• Irrespective of permanent/probationary employees, every other employee is eligible for

joining the PF scheme from the date of joining of service

• minimum 10% of basic pay for establishment employed less than 20 persons; sick
industries declared by necessary authority; beedi, jute, brick, coir, guar gum
factories/industries/voluntary coverage (less than 20 )

• other industries maximum 12% of basic pay

• a member can contribute voluntarily more than the statutorily prescribed rate (up to 100%
of basic pay) which is transferred to his PF A/c
 Contribution
 12% contribution by employee directly transferred to his PF A/c

 12% contribution by the employer out of which 8.33% is transferred to employee

pension scheme and REST i.e. 3.67% is transferred to PF A/c

 EDLI Admin Charges waived by EPFO.

 PF Admin charges have been further reduced from 0.65% to to 0.5% applicable

w.e.f. 1 June 2018, subject to a minimum of Rs. 500/ Rs. 75 in the case of functional/

non-functional organisations.

 0.50% EDLI is calculated on total EDLI slab (Rs. 15000) wages and payable by
employer towards EDLI fund
 The Employee’s Provident Fund Act
1952 Benefits
• Employees can take advances / withdraw the PF in case of retirement, medical
care, housing, family obligation, education of children & financing of life
Insurance Polices
• Upto 90% of the PF amount can be withdrawn at the age of 54 years or before
one year of actual retirement
• PF amount of the deceased member is payable to nominees / legal heirs
• Immediate income tax exemption under Sec 80C of IT Act
• Equal contribution by the employer
• Interest rate is usually higher than the prevailing market rate (present interest
rate @ 8.5%)
• PF A/c can be transferred if any member changes from one establishment to
other where the PF Scheme is applicable
• Totally tax free returns
 Employer’s share (to
Employee’s share (to EPS & Pension fund)
EPF fund) Ac-01 Ac-01 & 10

@12% of the Basic @3.67% of the Basic @8.33% of the Basic

+DA Ac-01 +DA, Ac-01 +DA, Ac-10

EPF total in [email protected]% EPS total in

(12%+3.67%) [email protected]%
Total Contribution to EPF &EPS Fund, Ac-01 & Ac-10 (15.67+8.33)=24%
PF Administrative Charges in Ac-02= 0.5% of Basic +DA(wef june2018)
(minimum 500 Rs. For functional and 75 Rs for Non functional organisation)
Contribution to EDLI, Ac-21 @0.50% of Basic +DA
The Current Wages Ceiling Limit for coverage under the Act is ₹: 15,000/- (Basic + DA)

By Contribution Account Administrative Account Total

EPF Ac-01 EPS Ac-10 EDLI Ac-21 EPF Ac-02 EDLI Ac-22 25%

Employee 12% - - - - 12%

Employer 3.67% 8.33% 0.50% 0.50% - 13%

 Calculation with Example

10,000(basic)+2000 (D.A)+4000 (HRA)=16000

10,000(basic)+2000 (D.A) = 12, 000 ( limit
15,000)

Employee Employer
12% (EPF) 3.67% (EPF) 8.33% (EPS) 0.50% (EDLI)
(EPF adm. chrg)
1440 440 1000 60
60
Total Employer contrib.- 1560
PF account- 3,000
Employee’s saving- 1440+440+1000=2880
 New EPF withdrawal Rules 2020
 The government has notified the amendment in rules regarding withdrawal of funds from
EPF accounts for COVID-19-related financial exigencies. According to the amended rules,
an EPF member can withdraw an amount equal to three months of basic and dearness
allowance (DA) or 75 per cent of the credit balance in the account, whichever is lower for
them.
 Partial withdrawal from EPF accounts is permitted in the case of an emergency such as
medical emergency, house purchase or construction, and higher education. Partial
withdrawal is subject to limits depending on the reason. The account holder can request
online for partial withdrawal
 EPFO allows withdrawal of 90% of the EPF corpus 1 year before retirement, provided the
person is not less than 54 years old.
 As per the new rule, EPFO allows withdrawal of 75% of the EPF corpus after 1 month of
unemployment. The remaining 25% can be transferred to a new EPF account after gaining
new employment.
 Tax exemption on EPF corpus is permitted only if an employee contributes to the EPF
account for 5 continuous years.
 (EPFO) has come up with a facility in the Unified Portal where the employee can enter the
date of exit from the previous employer by himself. Prior to this only the employer could
enter the exit date, but now even employees can enter the date of exit.
 Reasons for PF withdrawal

Subscribers can make a complete or partial withdrawal under the following circumstances:

 If the member has reached the age of retirement.

 If he/she needs to fund their house construction or pay their home loan.

 To cover medical expenses.

 To cover a wedding or education expenses.

 If they have been unemployed for a duration of more than one month.

 If they wish to move permanently abroad.

 If a female employee is resigning due to reasons such as pregnancy, childbirth, getting married,
etc.
 THE EMPLOYEE’S
PENSION SCHEME,1995
 APPLICATION:
 It is compulsory for all the member who has become the member of EPF scheme
CONTRIBUTION
Employee: Not required, Employer : (a) 8.33% on Basic + DA
It is to be noted that where the pay of the member exceeds Rs. 15000/- per month, the
contribution payable by the employer will be limited to the amt. payable on his pay
of Rs. 15000/- only.
PENSION BENEFITS
 Lifelong pension is available to the member and after his death members of the
family are entitled for the pension.( Minimum 1000/p.m. ,Maximum 7500 p. m.)
 The monthly retiring pension is decided on the basis of „pensionable Service‟ and
„pension Salary‟ and is worked out as follows:
Monthly Pension = (pensionable Salary x pensionable Service) / 70
 Pensionable Salary is the average contributing Salary immediately Preceding 12
months from the date of exit from the scheme, normally this would be limited to RS.
15000 per month.
 Pensionable Service can not exceed 35 yrs.
maximum pension: 15000 x 35 / 70= 7500 per month
Minimum pension: 1000 per month
 Eligibility Criteria

In order to be eligible for availing benefits under the Employees’ Pension Scheme
(EPS), an individual has to fulfil the following criteria:

 He should be a member of EPFO

 He should have completed 10 years of service

 He has reached the age of 58

 He can also withdraw his EPS at a reduced rate from the age of 50

years
 He can also defer his pension for two years (up to 60 years of age) after

which he will get a pension at an additional rate of 4% for each year

A employee can start receiving the pension under EPS only after rendering a
minimum service of 10 yrs. And attaining the age of 58/ 50 yrs.
 After 50 yrs. And before 58 yrs. Early pension is payable subject to
discounting factor @ 4% for every year falling short of 58 years.
 Process to check EPS balance
 The EPS balance can be checked on the EPFO portal with the help of the
Universal Account Number (UAN). However, individuals must complete
the UAN activation process first. The step-by-step procedure to check the EPF
balance after the activation of UAN is complete is mentioned below:
 You must visit the official website of EPFO
(https://www.epfindia.gov.in/site_en/index.php).
 Click on ‘For Employees’ under the ‘Our Services’ menu.

 Click on ‘Member Passbook’ on the next page.

 Next, enter the User Name (UAN), password, and captcha details. Click on

‘Login’.
 On the next page, various Member IDs will be displayed. Click on the

respective Member ID.

 The total pension amount that has been contributed will be displayed under

‘Pension Contribution’ column.

EMPLOYEES DEPOSIT LINKED
INSURANCE SCHEME,1976
 Purpose : To provide life insurance benefits to the employees of the establishments covered
by the EPF & MP Act, 1952
 Contribution under EDLI Scheme,1976Scheme,1976
 1. Employees : Not required
 2. Employer : (a) 0.5% on Basic + DA
 Where the monthly pay of an employee is more than Rs. 15000, the contribution payable in respect of
him by the employer is limited to the amts payable on a monthly pay of Rs. 15000 only.
Calculation:

{Average Monthly Salary of the Employee for the last 12
months (capped at 15,000/- p.m.) x 35 } + Bonus Amount
(Rs. 1,75,000/-)
 Therefore, the maximum payout under EDLI is capped at
Rs. 7,00,000/-.
Gazette notification 29 April
2021
OLD EDLI CALCULATION NEW EDLI CALCULATION
Example: monthly salary of a worker=18000 Rs. EDLI AMOUNT = 15000 x 35 +1,75,000
EDLI AMOUNT = 15000 x 30 +1,50,000
= 5,25,000 +1,75,000
= 7,00,000
= 450000 +1,50,000
= 6,00,000