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"Employee" as defined in Section 2(f) of the Act means any person who is employee for wages in any kind of work manual or otherwise. "Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment. "Excluded employee" means an employee who having been a member of the fund has withdraw the full amount of accumulation in the fund on retirement from service
"Employee" as defined in Section 2(f) of the Act means any person who is employee for wages in any kind of work manual or otherwise. "Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment. "Excluded employee" means an employee who having been a member of the fund has withdraw the full amount of accumulation in the fund on retirement from service
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"Employee" as defined in Section 2(f) of the Act means any person who is employee for wages in any kind of work manual or otherwise. "Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment. "Excluded employee" means an employee who having been a member of the fund has withdraw the full amount of accumulation in the fund on retirement from service
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Attribution Non-Commercial (BY-NC)
Formate disponibile
Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
means any person who is employee for wages in any kind of work manual or otherwise, in or in connection with the work of an establishment and who gets wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment. V Rhe Employees' Provident Fund Organisation (EPFO) is a statutory body of the Government of India under Ministry of Labour and Employment. It administers a compulsory contributory Provident fund, pension and a insurance scheme for Indian Work force. It is one of the largest social security organisations in the world in terms of members and volume of financial transactions undertaken. V Rhe Employees' Provident Funds and Miscellaneous Provisions Act, 1952 came into effect on 4th March 1952. Rhe Organization is administered by a Central Board of Rrustees, comprising of representatives of the Government of India, provincial governments, employers and employees. Rhe Board is chaired by the Union Labour Minister of India. Rhe Chief Executive of the EPFO, the Central Provident Fund Commissioner, reports to the Union Labour Minister through the Permanent Secretary in the ministry. Rhe head office of the Organisation is in New Delhi V All the employees (including casual, part time, Daily wage contract etc.) other then an excluded employee are required to be enrolled as members of the fund the day, the Act comes into force in such establishment. V "Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment and witch are paid or payable in cash, but dose not include 1. Rhe cash value of any food concession; 2. Any dearness allowance (that is to say, all cash payment by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other allowance payable to the employee in respect of employment or of work done in such employment. 3. Any present made by the employer. "Excluded Employee" as defined under pare 2(f) of the Employees' Provident Fund Scheme means an employee who having been a member of the fund has withdraw the full amount of accumulation in the fund on retirement from service after attaining the age of 55 years; Or An employee, whose pay exceeds Rs. Five Rhousand per month at the time, otherwise entitled to become a member of the fund. V Rhe Employee Provident Fund, or provident fund as it is normally referred to, is a retirement benefit scheme that is available to salaried employees. V Employees' Provident Fund Scheme takes care of following needs of the members: 1. Retirement. 2. Medical care. 3. Housing. 4. Family obligation. 5. Education of children. 6. Financing and insurance policy. V As per amendment-dated 22.9.1997 in the Act, both the employees and employer contribute to the fund at the rate of 12% of the basic wages, dearness allowance and retaining allowance, if any, payable to employees per month. Rhe rate of contribution is 10% in the case of following establishments: V Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97. V Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction, V Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and V Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/ Factories. Rhe contribution under the Employees' Provident Fund Scheme by the employee and employer will be as under with effect from 22.9.1997. V Rhe rate of interest is fixed by the Central Government in consultation with the Central Board of trustees, Employees' Provident Fund every year during March/April. Rhe interest is credited to the members account on monthly running balance with effect from the last day in each year. Rhe rate of interest for the year 1998-99 has been notified as 12%. Rhe rate of interest for 99- 2000 w.e.f. 1.7.'99 was 11% on monthly balances. 2000-2001 CBR recommended 10.25% to be notified by the Government. A member of the provident fund can withdraw full amount at the credit in the fund on retirement from service after attaining the age of 55 year. Full amount in provident fund can also be withdraw by the member under the following circumstance: V A member who has not attained the age of 55 year at the time of termination of service. V A member is retired on account of permanent and total disablement due to bodily or mental infirmity. V On migration from India for permanent settlement abroad or for taking employment abroad. V In the case of mass or individual retrenchment. ¢ In the case of the following contingencies, the payment of provident fund be made after complementing a continuous period of not less than two months immediately preceding the date on which the application for withdrawal is made by the member: V Where employees of close establishment are transferred to other establishment, which is not covered under the Act: V Where a member is discharged and is given retrenchment compensation under the Industrial Dispute Act, 1947. V A member can withdraw upto 90% of the amount of provident fund at credit after attaining the age of 54 years or within one year before actual retirement on superannuation whichever is later. Claim application in form 19 may be submitted to the concerned Provident Fund Office. V Amount of Provident Fund at the credit of the deceased member is payable to nominees/ legal heirs. Claim application in form 20 may be submitted to the concerned Provident Fund Office. V Rransfer of Provident Fund account from one region to other, from Exempted Provident Fund Rrust to Unexampled Fund in a region and vice-versa can be done as per Scheme. Rransfer Application in form 13 may be submitted to the concerned Provident Fund Office. V Rhe member of Provident Fund shall make a declaration in Form 2, a nomination conferring the right to receive the amount that may stand to the credit in the fund in the event of death. Rhe member may furnish the particulars concerning himself and his family. Rhese particulars furnished by the member of Provident Fund in Form 2 will help the Organization in the building up the data bank for use in event of death of the member. V As soon as possible and after the close of each period of currency of contribution, annual statements of accounts will de sent to each member through of the factory or other establishment where the member was last employed. Rhe statement of accounts in the fund will show the opening balance at the beginning of the period, amount contribution during the year, the total amount of interest credited at the end of the period or any withdrawal during the period and the closing balance at the end of the period. Member should satisfy themselves as to the correctness f the annual statement of accounts and any error should be brought through employer to the notice of the correctness Provident Fund Office within 6 months of the receipt of the statement. V Rhe amount you invest is eligible for deduction under the Rs 1,00,000 limit of Section 80C. V If you have worked continuously for a period of five years, the withdrawal of PF is not taxed. V If you have not worked for at least five years, but the PF has been transferred to the new employer, then too it is not taxed. V Rhe tenure of employment with the new employer is included in computing the total of five years. V If you withdraw it before completion of five years, it is taxed. V But if your employment is terminated due to ill-health, the PF withdrawal is not taxed. V Statutory Provident fund. V Voluntary Provident fund. V Recognized Provident fund (RPF). V Unrecognized Provident fund (URPF). V Public Provident Fund (PPF). V For all industries employing 20 or more persons engaged in any industry specified in Schedule - I attached to the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 or for all Establishments or classes of Establish- ments to which the said Act has specifically been made applicable by the Central Government by issue of notification in Gazette of India, such Provident Fund is compulsory for employees drawing salaries (Basic + DA) of upto Rs. 6500/- pm. V is set up under the provisions of the PF Act, 1925. Rhis fund is maintained by government and semi-government organisations, local authorities, railways, universities and recognised educational institutions. V For all other Industries/Establishments and for all employees drawing salaries of above Rs. 6500/-/- employed in Industry/Establishment in which such PF is compulsory, the Provident Fund is voluntary and the benefit of provident fund can be extended by setting up a private PF Rrust and by getting the same recognized under Income tax Act, 1961 or by getting the Establishment/ employees covered under the EPF & MP Act, 1952 /EPF Scheme, 1952 on voluntary basis. V It is a fund to which the Commissioner of Income-tax has given the recognition as required under the Income-tax Act. V It is the Provident Fund, which is not recognized by the Commissioner of Income-tax. Rhe employee and employer both contribute towards this fund. Rhe employee's contribution to URPF is not treated as deductible expenditure. V Rhe Public Provident Fund has been established by the central government. You can voluntarily decide to open one. You need not be a salaried individual, you could be a consultant, a freelancer or even working on a contract basis. You can also open this account if you are not earning. V Self-employed people (doctors, lawyers, accountants, actors, traders, pensioners) can also enjoy the benefit of tax rebate under section 88 by contribution to PPF V Rate of return on investment is 8%. V Rhe accumulated sum is repayable after 15 years. Rhe entire balance can be withdrawn on maturity, that is, after 15 years of the close of the financial year in which you opened the account. V It can be extended for a period of five years after that. During these five years, you earn the rate of interest and can also make fresh deposits. V Rhe amount you invest is eligible for deduction under the Rs 1,00,000 limit of Section 80C. V On maturity, you pay absolutely no tax. V Any individual can open a PPF account in any nationalised bank or its branches that handle PPF accounts. You can also open it at the head post office or certain select post offices. V Rhe minimum amount to be deposited in this account is Rs 500 per year. Rhe maximum amount you can deposit every year is Rs 70,000. V Even in Factories/Establishments where PF. is compulsory, such Factories/ Establishment have two options - one to comply with the statutory scheme i.e. Employees Provident Fund Scheme, 1952 and another to set up their own PF Rrust, get it recognized by the Income Rax authorities and to seek exemption from RPFC/appropriate Govt. to run its own Rrust subject to such conditions as may be imposed by them. Rhe former is called unexempted establishments; the later exempted ones. V
Employerǯs Exempt from Exempt upto Exempt from Employer does contribution tax 12% salary- tax not contribute to PF excess is taxable Deduction Available Available Not available Available under section 80c Interest Exempt Exempt upto Exempt Exempt credited to PF notified rate Lump-Sum Exempt Exempt in Employee Exempt payment at some cases contribution is Retirement exempt V Labour minister Mallikarjun Kharge declared a 9.5% bonanza on provident fund deposits, as decided by the Central board of trutees(CBR) on September 15. V Its a one percentage point increase in the rate from the 8.5% paid in the past five years. V Finance ministry notification says that any rate in excess of 8.5% will be taxed. V Rhe Central Board of Direct Raxes notified a taxfree PF rate of 8.5% for 2010-11 effective from September 1. V Rhe 1% extra income (or Rs 1,700 crore) that the labour ministry has projected as a gift to the workforce would be fully taxable. V Rhe tax-free PF rate notified by the income tax department has never been lower than the EPF rate declared for the year. V In recent years, while the EPF rate was at 8.50%, the ceiling was at 9.50%. Rhis year, when the EPF rate has been hiked to 9.50%, the ceiling on tax-free provident fund returns has been lowered to 8.50%. V Rhe income tax department notifies a tax-free PF rate for the whole year. But this year, itǯs only applicable from September 1. So the 9.5% provident fund return would be tax-free from April to August but taxable thereafter. V EPFO, Chatterjee said after reconciliation of account on accrual- based system found that it had a surplus of Rs 1,731 crore. V As the money belonged to over six crore subscribers, the CBR decided to raise the interest rate for this fiscal by a percentage point to 9.5 from 8.5 per cent, a rate being maintained for the past five years since 2005-06. V Rhe surplus in the interest suspense account is the main reason to increase the interest rate by 1% for the F.Y. 2010-2011 of the EPF. V Rhe move to increase the interest rate by one percentage point from the earlier 8.5%, would cost an additional Rs. 1,600 crore, which would be met from the surplus of Rs.1,731 crore available in the interest suspense account with the EPFO V EPFO board members, however, are confident that the income tax department would reconsider its decision. V If the IR department re-notifies the interest rate then it would be beneficial for the workers as it would increase the returns. V If the interest rate decided by the IR dept is 9.5% then EPF will be regarded as most attractive in terms of return on investment along with tax benefits. V Rhe incremental PF return will be taxable in the hands of the workers if the finance ministry doesnǯt re-notify the tax ceiling. V Levying the tax would be difficult because the tax-free PF rate notified by the Income Rax department is applicable only from September 1st. So the 9.5% PF return would be Rax-Free from April to August but taxable thereafter. V For company-run trusts calculating the tax liability on 1% PF income for 7 month would be a headache. V Employeesǯ Provident Fund Organisation (EPFO) will face a lot of problems since it manages 5 crore PF accounts. V Rhe increase in PF rate will benefit only the salaried employees and not those who are self employed. V Rhe accounts' which are not operated for 36 months will stop getting interest. V Rhe corporateǯs which follow their own PF trusts have to match the new rates. V Rhe raising of the rate of return to 9.5 per cent has increased the visibility of the EPF in the minds of investors. V Rhe EPF interest is higher than the 8% return offered by post office deposits and provident fund, and the 7.75% rate of interest on bank deposits held up to 10 years. Even 100% debt funds may be unable to match the EPF's interest of 9.5% as they hold their securities to maturity. V Rhe raising of the return here also means a challenge for other areas like monthly income plans of mutual funds and the new pension scheme because investors will scrutinise their performance closely. V Pension funds and long-term debt options have a return that is taxable, whereas the return on EPF is Rax free. V Any investment made under EPF follows the EEE model: First ǮEǯ-Any amount invested in EPF is exempted under section 80C to a limit of Rs. 1 lakh. Second ǮEǯ-All the interest earned in EPF account is tax-free and the account holder doesnǯt have to pay any tax on the same Rhird ǮEǯ-Rhe amount that you withdraw at the time of maturity is tax- free as there is no tax at maturity. V We can see the rates rolling back from 9.5% to 8.5% in the next fiscal year as it ll be difficult for EPFO to generate the return because: Rhe money canǯt be invested in to equity markets so that extra return is generated. Rhis was because the CBR members opposed the idea of investing in stock markets. Rhis letter was given to EPFO by the finance ministry. Rhe reason for the opposition was how can the hard-earned money of the common man be exposed to market risks. Rhe returns earned from safe deposit instruments are too less to offer a return of 9.5% V Commenting on the decision, industry chamber FICCI has indicated that the development could put pressure on interest rates of competing saving instruments and would have negative implications for the government finances. V Another body, Assocham, said that the high interest rate will not be sustainable either by the EPFO or by exempted trust on the basis of investment pattern decided by the government.