The Miscellaneous Provisions Act and the Employees' Provident Funds govern the Employees' Provident Fund (EPF) provisions. It tries to mobilize employee and employer savings through mandatory contributions to the provident fund. The EPFO administers and manages the PF Fund and aids the Central Board of Trustees.
This article contains a brief guide on making online EPF payments and a list of banks that offer the service. Go through it briefly to know everything and the major changes brought to EPF with the Covid-19 pandemic.
The EPF is a retirement savings program that helps people build a sufficient corpus. The EPF Act of 1952 created the plan now managed by the Employees' Provident Fund Organisation (EPFO).
Under this program, a person would contribute 12% of their basic monthly salary to the fund. The boss matches this balance by donating an equal amount. You will take a lump sum payment when you retire, which will include all of your personal and business costs, as well as interest. The EPF is a low-risk fund because it is managed by the Indian government and pays a fixed return.
EPF accounts are necessary for employees in organizations with at least 20 employees. However, several organizations with fewer than 20 employees also frequently use EPF as well.
Employees with a salary of Rs. 15,000 or more must additionally open an EPF account. On the other hand, most businesses make the facilities available to all employees, regardless of remuneration. You can also shift the EPF corpus from one task to the next fast. It is made possible by the UAN system.
The contribution of employers is divided into varying categories, such as:
The employee's minimum wage and dearness allowance are used to calculate the EPF contribution amount. The following are the details of employee and company contributions to the EPF:
Employee contributions to the EPF: The employer deducts 12% of the employee's monthly pay (basic + dearness allowance) as an EPF contribution each month. The total donation is deposited into the EPF account of the employee.
Employer contribution to the EPF: Similarly, the corporation contributes 12% of the employee's Earnings to the EPF.
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Though the employer and the employee both contribute to the PF account, only the employer registered with the PF Act can make payments to the account.
Employers can make online PF payments through EPFO online payment website or an authorized Bank's website (if the bank enables direct payment through their website) where the employer has a bank account and net banking.
Here are the steps for EPF e-payment:
Here is a list of authorized banks that are available on their websites to ensure online EPF payments:
The date on which employers deduct and pay the PF amount is known as the EPF payment due date. On or before the 15th, a Deduction is made from an employee's salary every month.
If you pay your EPF Challan payment late, you will be charged a penalty. There are two sorts of penalties that apply to late EPF payments.
If an employer fails to deposit EPF contributions before the deadline, a penalty in the form of interest is imposed. The employer is subjected to a daily interest rate of 12% per annum.
The following penalties apply if the employer fails to pay the Challan.
|Duration of delay||Rate of interest (per annum)|
|Up to 2 months||5%|
|More than six months||25%|
The following are some of the adjustments implemented by the finance ministry to mitigate the adverse effects of the country's covid-19 shutdown.
Partially withdrawing from the EPF account for purchasing a home, wedding expenditures, or medical expenses is possible. The cause for the withdrawal determines the amount that can be removed. It's worth noting that partial withdrawals have a lock-in period, which varies depending on the reason for the withdrawal.
Under some conditions, the whole PF balance can be withdrawn. Retirement age, resignation owing to permanent total mental/physical disability, permanent relocation to another nation, death of the member are just a few examples.
A few reasons why EPF should not be withdrawn before five years of service are listed below:
Benefits under IT Act's Section 80C are not available: If individuals claim benefits under IT Act's Section 80C and withdraw their PF amount, the interest gained on the employee's contribution must be taxed.
The following sum will be taxed: If a PF withdrawal is made within the first five years of employment, the amount withdrawn gets added to the Taxable Income. If the amount withdrawn exceeds Rs.50,000 and the withdrawal is made within five years, the amount is subject to a 10% tax reduction. Individuals are exempt from paying this sum if they file Forms 15G and 15H with the IT Department.
After discovering that obtaining an employer's consent or attestation to assist a PF withdrawal was causing a lot of headaches for many employees, the EPFO bypassed the process, and now employees can withdraw without their employers' attestation. The introduction of UAN brought this shift in the EPF, considering employees now only need to link their Aadhaar to their UAN for a withdrawal. After that, there are two options for withdrawing without the employer's signature: with or without an aadhaar card.
Here are the steps to withdraw the amount with an aadhaar card:
Here are the steps to withdraw the amount without an aadhaar card:
Employees who want to raise a complaint can do so using the EPFO's member site, which has a specific section for them to fill out a grievance registration form and file a complaint. Employees frequently have complaints about withdrawals, PF settlements, account transfers, and pension settlements, among other things. To file an EPF complaint, follow these steps:
Individuals can Call EPFO's toll-free number
1800 118 005 if they have questions about their UAN or Know Your Customer (KYC).
You can easily make an EPF payment online by following a few simple steps. Because you'll be requested to submit your ECR file at some point, it's a good idea to have it ready ahead of time. Furthermore, it is also advisable to keep your UAN and password handy and secure at all times as it helps in various steps while accessing the EPFO portal.
A: When making an EPF payment online, you will be requested to upload your ECR file.
A: You can quickly check your EPF balance by using the EPFO website to access your EPF Passbook.
A: The EPF passbook can be seen or downloaded by EPF members who have completed their UAN Registration on the EPFO portal.
A: Employees cannot contribute to the EPF on their own. They must be employed by a company covered by the EPF and MF Act of 1952.
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