Provident Fund– An act which provides establishment of provident fund, pension fund & deposit linked insurance fund for eligible employee in eligible establishment and factories.

1) Applicability – All establishments employing 20 or more persons (5 or more for Cinema Theaters) are brought under preview of the Employee provident fund act.

Future prospects – To widen its scope limit is proposed to be reduced to 10 or more employee. This move will bring over five million additional formal sector workers under the net of social security schemes run by the EPFO.

2) Eligibility – An employee skilled/unskilled getting salary up to Rs 15000 are eligible for membership of fund.

Future prospects – As per new Proposed Employees Provident Fund Amendment 2016 Employees with salary earning up to Rs.25000 per month will be covered under Employees Provident Fund.

FAQ

  • If an establishment is having more than 20 person (let say 23) with only 3 employee drawing salary up to 15000. In this case the act is applicable on such establishment.

3) Payment Of Dues & Return – Employer is required make the payment of Provident fund dues and file return on monthly basis. ECR (Electronic challan cum return) is required to fill on or before 15th of the following month.

Note – 5 days grace period is no more applicable on ECR.

4) EPF Balance – Employee can check the amount available in their PF account using online portal, SMS or Smartphone application. Balance can be checked using UAN and registered mobile number of the employee.

5) Withdrawal- A member is eligible to apply for withdrawing his provident and pension fund only after 2 months from date of resignation, provided that he/she is not employed during the said 2 months.

a) The member should submit Form 19 & 10C to withdraw his provident fund dues on leaving the service/retirement (get it signed by previous employer and submit it to respective provident fund office).

b) TDS on withdrawal – Section 192A levies TDS on amount withdrawn from PF account if the period of service is up to 5 years and amount withdrawn is more than 50000 Rs. If employee furnishes form 15 G/H then no TDS will be deducted.

6) Loan on PF amount- Members are eligible to withdraw monies as advances from their PF accounts for purposes like marriage, education, medical treatment etc. This is tax and interest free.

Employee State Insurance – The major objective of the Act was to provide medical benefits to employees

1) Applicability – Factories using power in the manufacturing process and employing 10 or more persons at any time during the financial year.

2) Wage limit– Employees of covered units and estab­lishments drawing wages up to Rs. 21000 per month come under the purview of the ESI Act 1948 for social security benefits.

3) Return & Compliance-

  • The employer shall submit Declaration Form in respect of all coverable employees in the unit. All Employees are issued ESIC no. by using online portal.
  • The employer shall deposit both employees’ and employers’ contribution as per specified rates along with return within 21 days of the following month.
  • The Employer shall maintain all such records and registers as are required under the Act and produce them for verification.

4) Future Prospects

  • The Requirement of Digital signature may be mandated for all employers.
  • A common portal for registration under ESI and PF laws i.e. “ training.shramsuvidha.gov.in ”
  • Government of India plans to do away with all employer codes being issued by separate labour enforcement agencies such as ESIC, EPFO and DGMS etc by replacing them with new Labour Identification Number (LIN).

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4 responses to “Practical Understanding of ESI & PF – Present & Future Scenario”

  1. Ch Srinivasa Rao says:

    how can do for new enrolment of pension fund benefits for employers

  2. shivayogi says:

    If an establishment is having more than 20 person (let say 23) with only 3 employee drawing salary up to 15000. In this case the act is applicable on such establishment. in this category you have told that FAQ but you have not given any answer for the same.

  3. Anubhav Jain says:

    For query write us – anubhav5jain@gmail.com

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