Impact Analysis of Recent Changes Enacted Thought Budget 2018 in Employee Provident Fund Act, 1952

Purpose:

  • To boost employment opportunities by shifting of employer’s burden.
  • Increase limit of basic wages.
 EXISTING PROVISIONS  PROPOSED AMENDMENT
As per section 6 of the EPF, MP Act, 1952:

♦ Employer contributes 12% of the basic wages of the newly added employee after the date of the registration (whether employed directly or through contractor) towards provident fund, out of which:

–  8.33% contributed towards EPS is reimbursed by the Government for three years after the date of registration, subject to the prescribed conditions in Budget 2016-17.

♦ Employee was still required to contribute 12% of basic wages towards his/her EPF contribution.

Note:

1.  No distinction was made between male or female employees.

2. Scheme became operational from 09.08.2016

As per proposed amendment:

♦ Employer contributing 12% of the basic wages of the newly added employee after the date of the registration (whether employed directly or through contractor) towards provident fund shall be fully reimbursed by the Government for three years, subject to the following conditions:

–  Applicable for newly added employees, after the date of registration.

–  Salary of the newly added employees’, shall be less than or up to Rs. 15,000.

♦ Employees already covered under the scheme, will be updated to 12% from 8.33% for the remaining duration of the first three years.

♦ Contribution from women employees towards their provident fund shall be 8% of her basic wages instead of 12%, for three years.

–  However, employers’ contribution would still be 12% of her basic wages towards EPF contribution and shall subject to full reimbursement by the Government as proposed in Budget 2018.

Conditions for availing reimbursements:

a. All establishments registered with EPFO can apply for availing benefits.

b. Establishments should have LIN allotted to them under Shram Suvidha Portal.

c. Employee should have a valid Aadhar linked UAN and wages less than Rs. 15,000.

d. Registration on PMRPY portal mandatory to avail benefits.

e. Establishment should have a valid organization PAN.

f. Establishment must have a valid bank account, the details of which are to be entered and through which payments may be made to the establishment.

g. Establishment should have submitted their ECR for the month of March, 2016.

h. Establishments should have added new employees on or after 01.04.2016.

However, no such condition has been notified, but, it is very likely that there would not be any change in the already prescribed conditions under existing scheme.

Author Bio

Qualification: CS
Company: N/A
Location: DELHI, New Delhi, IN
Member Since: 31 Mar 2018 | Total Posts: 2

My Published Posts

More Under Corporate Law

Posted Under

Category : Corporate Law (3930)
Type : Articles (17002)
Tags : EPF (288) EPFO (257) Provident Fund (223)

4 responses to “Impact of Recent Changes vide Budget 2018 in EPF Act, 1952”

  1. Srk says:

    It is basic salary

  2. Diensh says:

    wages less than 15000, so here wages means what – basic or gross?

  3. Shailesh Agarwal says:

    Dear All,

    Is the new PF rule is applicable from 1st April 2018 for new female employees 8% contribution

    Thanks
    Shailesh

  4. Has EPFO started accepting application from eligible subcribers who are still in service for enhanced pension based on supreme court judgement in this behalf.

    Regards,

    (Kapil Khamesra)
    9910029717

Leave a Reply

Your email address will not be published. Required fields are marked *