Employees Provident Fund is a retirement help plan for all salaried individuals. Employees Provident Fund Organization of India (EPFO) handles the fund, and every business with twenty or more employees must enrol with EPFO.
During the employment period, both the employee and the employer contribute 12 per cent of the basic salary of the employee to the EPF account. The employee’s complete 12 per cent goes into their EPF account, while the employer’s 3.67 per cent goes into the employee’s EPF account. The remaining 8.33 per cent is diverted to the Employees’ Pension Fund Scheme by the employer (EPF).
What is PF?
A social security system known as Provident Fund was established in order to encourage employees to save and to benefit them in retirement. Each month, the employee and the employer contribute to the Provident Fund (PF). With a few notable exceptions, an employee’s contribution to the PF may only be withdrawn during the duration of their job. Employers registering with PF are required to submit their PF returns on a monthly basis. Each month’s 25th is the deadline for completing the PF return files. We shall go into great detail regarding the several forms that are used to file PF returns here. Employers can utilize the Unified site to conveniently file their PF returns.
Who can apply for PF?
All businesses that have registered for employee provident funds, or EPFs, are required to file an EPF return each month. Filing the EPF Returns is required if you have an EPF Registration. Employer and employee contributions to the Employee Provident Fund (EPF) total 12% of base pay over the course of employment. The employee’s EPF account receives a 3.67 percent transfer from the employer. The Employees Pension Fund (EPF) receives the remaining 8.33 percent from the employer. When the employee retires (on or after age 58), if they are jobless for two months, or if they pass away before reaching the designated retirement age, they may withdraw this sum.
The Advantages of Filing a PF (Provident Fund) Return
- Employees’ well-being
- Compliance with the Law
- Any business that complies with the EPF’s standards will profit from the scheme. Aside from that, the company would be transparent throughout the whole provident fund enrollment process.
More Social Security
In addition to maintaining a safe social security system, the Employee Provident Fund Organization oversees the entire PF process (EPFO). Such an organisation regulates the whole procedure of PF registration. As a result, adhering to such systems makes the whole process much more manageable.
Benefits of Insurance
The Employee Deposit Linked Insurance Scheme benefits any organisation with no insurance (EDLI). Employees can obtain insurance benefits from this programme. 5% of the monthly contribution should be paid as a premium for this insurance.
Medical Benefits
In an emergency, the employee can take a set salary from this contribution, equivalent to six times or the total amount, whichever is smaller.
Tax benefits
There are several types of tax incentives available under this system. The company and the employee both can benefit from such advantages.
What information does the employer need to provide?
- Name and address of the company and information about the headquarters and branches.
- Company’s Incorporation Date
- Employee information should be provided (name, date of joining, salary, etc.)
- The company’s operations
- Details about the director
- PAN number
- The company’s bank account
Forms to be familiar with for PF Return
Form 2: Under the Employment Provident Fund and Employment Family Pension Scheme Flagship scheme, it is filed as a declaration and nomination. When an employee joins the company, they must file Form 2. This form must be turned in along with Form 5. Form 2 is separated into two sections, Part A and Part B. Nominating the beneficiaries of an account holder’s EPF balance in the case of their death is covered in Part A of Form 2. Furthermore, the nominee’s details from Part A should be provided in Part B as well.. Once more, this part needs to be properly signed, or a thumb impression needs to be produced at the conclusion.
Form 5: The information on newly enlisted employees in the provident fund program is included in Form 5, a monthly report. Details like the name of the organization, its address, its code, the employee’s account number, their name, their middle name (husband or father), their date of birth, their joining date, and their work history must all be included in Form 5.
Form 10: The information about the employees who have stopped participating in the program for that particular month is included in a monthly report. Details like the account number, the employee’s name, the name of the spouse or father, the date of service termination, and the reason for service termination are all included in Form 10.
Form 12 A: The payment information that was contributed to each employee’s account for a specific month is listed in this Form 12 A report.
Form 3A: The Employee Provident Fund and Employee Pension Fund contributions made by subscribers, members, and employers over the course of a year are shown on Form 3A, month by month. Every person involved in the scheme calculates the data.
Form 6A: Another form for consolidated annual contribution statements that contains information about each establishment member’s yearly contribution is Form 6A.
What is the PF Return Filing Process?
The employer uses form 2-This form for a flagship scheme under the Employee Family Scheme that the employee participates in. Form 2 should be submitted with Form 5 to complete the above. According to the rules, parts A and B must be filed in this section.
Form 5 is a monthly report and compliance form that must be filed—any employee who has recently enlisted in the provident fund systems.
Form 10- This form is for any individual or employee who is not a member of the organisation.
Annual PF Filing- Annual PF returns must be filed by April 30th of each year, and this must be done by submitting Form 3A and Form 6A.
Annual Account Statement- The EPFO is also required to issue a yearly account statement reflecting the filings.
- A copy of the collaboration agreement (In case of partnership firm)
- Certificate of Incorporation (Certificate of Incorporation) (In case of Private or Public Company)
- Certificate of Registration (In case of society)
- Details of the company’s PAN
- Document of Incorporation
- Employee salary information Balance Sheet information
Consequences of non-filing of PF Return
- 5% rate of penalty on the furnished amount if the filing is done beyond due date but before 2 months
- 10% rate of penalty on the furnished amount if the filing is done after 2 months but before 4 months from the due date
- 15% rate of penalty on the furnished amount if the filing is done after 4 months but before 6 months from the due date
- 25% rate of penalty on the furnished amount if the filing is done after 6 months from the date of filing.
FAQs
How can I return my PF amount?
To access the EPFO website, you need to enter your password, captcha, and UAN (Universal Account Number). Next, select “Claim (Form 31, Form 19, Form 10C and Form 10D)” by clicking on the “Online Services Tab.” Click “Verify” after entering the bank account number associated with your Provident Fund account.
What happens to PF after 5 years?
When an account holder prematurely withdraws their PF amount, they might also reduce their tax obligation. Withdrawals are typically subject to TDS. But, as per the updated EPF withdrawal guidelines for 2024, there won’t be any TDS applied to fund withdrawals made after at least five years of service.