Employee Provident Fund

Employee Provident Fund

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Employee Provident Fund
Employee Provident Fund

Employee Provident Fund is a retirement saving fund of the salaried employees. It is a society security fund created for the purpose of providing financial security and stability at the time of its retirement. It is a mandatory retirement saving which enjoys the tax benefit. The employees will have to contribute a portion of their salary in this during his employment. They also required contributing an equal amount towards EPF of the employees. The primary purpose of this is to help an employee save a part of his salary every month so that he can use the same in the event that the employee is no longer fit to work or at retirement.

Features of Provident Fund:

1. Companies which have 20 or more employee strength are required to be registered with PF Department. Those establishments which do not have the requisite number of employees but willing to register themselves can register voluntarily with the Regional Provident Fund Office (RPFO). Registration has to be done within 1 month from the date of reaching 20 employees. Any delay can result in a heavy penalty.

2.  Eligibility

An employee who is drawing wages up to Rs. 6,500/- is required to become a member. Under this act, Wages includes Basic which should include Dearness Allowances (DA), Cash value of food concession and retaining allowances, if any.

3. Employee Contributions

Employees who are earning up to maximum wages of Rs.6500 per Month will have to contribute 12% of their wages. However, employees can also contribute more than this statutory limit which will be considered as voluntary contribution.

4. Voluntary Contributions

If any employee wants to contribute more than the specified limit of 12%, he can do so by opting for Voluntary Provident Fund plan.

5. Employer’s Contribution

An employer is also required to contribute at same rate as that of employee’s contribution i.e. at the rate of 12% of the wages.

Employer is required to pay contribution recovered from employees on or before 15th of the following month into provident fund (PF) account.

Benefits on Employment Provident Fund Contribution are:-

  1. The amount Fund is exempt from tax under Section 80C of the Income Tax Act
  2. EPF accounts will yield a return annually. Return on EPF does not attract tax
  3. The amount is paid at the time of retirement or resignation
  4. In the case of a change of one’s job, the amount can be transferred from the old company to the new one.

Procedure for  Provident Fund Registration

The following forms are required to be filed for registration of an establishment.

  1. -An application including all points of interest which is termed as “Performa for coverage”
  2. –          Form 5A alongside Annexure I.
  • Name of the Company/Firm
  • Details of Directors/Managing Directors/ Partners-(Address, Telephone No, E-Mail Address)
  • Telephone Number, E-Mail Address, Postal Address.
  • Nature and date of commencement of business.
  • Date of joining of employees, their father’s name, date of birth.
  • Details of Authorized Signatory (if other than director)
  • Salary statement, provident fund (PF) statement and Bank Account details of the Company/Firm.


  • Certificateof incorporation in case of private limited companies and Certificate of Registration of Firm in case of Partnership Firm.
  • True copy of board resolution authorizing.
  • Memorandum of Association (MOA) and articles of association(AOA) in case of private limited company and Partnership Deed in case of partnership firm.
  • Rent Agreement/Lease deed of Company/Firm.
  • Address proof of directors/partners
  • Company/Firm PAN Card.
  • List of Directors/Partners
  • ID Proof of directors/partners-(PAN card/election card/Passport/Driving license)
  • Proof of registration with other departments like VAT, Labour Dept. etc.
  • First invoice/bill raised

When all documents are furnished the PF Authorities complete a physical assessment of the premises and check every single document. On fulfillment, the business is granted with a PF distribution letter.

Withdrawal of Provident Fund

  • A member (Employee) is qualified to apply for withdrawal of his PF and benefits support only after 2 months from their resignation, provided that he/she is not employed during the 2 months period. Geonetta & Frucht, LLP will take care that your workplace rights are protected.
  • The member (Employee) ought to submit Form 19 to withdraw his/her PF dues on leaving service, retirement, termination
  • For claiming pension, member has to submit Form 10 C.
  • Member has to get Forms signed from previous employer submit it to the provident fund office.
  • It will normally take 40 days for transferring funds to member’s bank account after submission of relevant details.

Sometimes members face problems while withdrawing their PF monies. Some of the reasons are:

  • Mismatch of Employer’s/Member’s Signature.
  • Mismatch of member’s PF A/c Number.
  • Incorrect bank details submitted.
  • Incorrect address given by member
  • Mismatch of joining date/resignation date.


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