ESIC Registration Process:
Earlier, there was manual registration. Now, the ESIC registration is completely online. Following are the steps involved in ESIC Registration:
Step 1: Log in to ESIC Portal
An employer needs to get himself registered on the ESIC Portal.
An employer can register on the ESIC portal by clicking on the ‘Sign Up’ button under the ‘Employer Login’ option on the home screen. After clicking on the ‘Sign up’ button, the employers need to fill in the details and submit the form.
Step 2: Confirmation Mail
After submitting the form for sign up to the portal, the employer will receive a confirmation mail sent to the registered mail id and mobile number entered at the time of sign up.
The email will contain the username and password details for registering as an employer and employee under the ESIC scheme.
Step 3: Employer Registration Form-1
Next, log in to the ESIC portal along with the username and password received in the mail. This will redirect to the page having the option of ‘New Employer Registration’.
Click on the ‘New Employer Registration’ option. Next, select the ‘Type of Unit’ from the drop-down list and click on the ‘Submit’ button. The ‘Employer Registration – Form 1’ will appear and the employer needs to fill in the details.
The Employer Registration Form-1 contains details pertaining to the unit of the employer, details of the employer and employees. Once, the complete form is filled by the employer, he needs to click on the ‘Submit’ button.
Step 4:Payment for Registration
After submission of the Employer Registration Form-1, the ‘Payment of Advance Contribution’ page will open where the employer needs to fill the amount to be paid and select the payment mode.
The employer will need to pay the advance contribution for 6 months.
Step 5: Registration Letter
On the successful payment of six months advance contribution, the system generated Registration Letter (C-11) is sent to the employer which will contain a 17 digit Registration Number by the ESIC department.
The Registration Letter (C-11) is a valid proof of registration of the employer.
Documents Required for ESIC Registration:
Since the procedure for registration is online, no physical documents are required to be submitted. The documents required while filling the online registration form are:
- A registration certificate obtained either under the:
- Factories Act, or
- Shops and Establishment Act
- Certificate of Registration in case of Company, and Partnership deed in case of a Partnership
- Memorandum of Association and Articles of Association of the Company
- A list of all the employees working in the Establishment
- PAN Card of the Business Entity as well as all the Employees working under the entity
- The compensation details of all the employees
- A cancelled cheque of the Bank Account of the Company
- List of Directors of the Company
- List of the Shareholders of the Company
- A register containing the attendance of the employees
Benefits of ESIC Registration:
The benefits of registering under this scheme are varied. Some of them are:
- Sickness benefits at the rate of 70% (in the form of salary), in case of any certified illness and which lasts for a maximum of 91 days in any year.
- Medical benefits to an employee and his family members.
- Maternity benefit to the women who are pregnant (paid leaves).
- If the death of the employee happens while on work – 90% of the salary is given to his dependents in the form of a monthly payment after the death of the employee.
- Same as above in case of disability of the employee.
- Funeral expenses.
- Old age medical care expenses.
Returns Filed Every Year After the Registration is Finalised:
After the registration ESI Returns have to be filed twice a year. The following documents are required for the filing of the returns:
- Register of attendance of the employees.
- Form 6 – Register.
- Register of wages.
- Register of any accidents which have happened on the premises of the business.
- Monthly returns and challans.
Rate of Contribution Under ESI:
The ESIC is a social security system that is designed to provide socio-economic protection to workers and their immediate family and dependants. The rates for the contribution are declared by the ESIC and are revised from time to time.
The contribution includes both the employer and employee contribution. The latest revision is w.e.f. 01.07.2019 and the rates are as follows:
Employer’s Contribution – 3.25% of the wages paid/payable.
Employee Contribution – 0.75% of the wages paid/payable.
If the employee’s daily average wage is up to Rs.137, they are exempted from making the contribution; however, the employer must make their share of the contribution.
The Employers must deduct the employee contribution from the wages bill and must pay the employer and employee contribution at the rates specified above within 15 days of the end of the month in which contributions are made.
Designated branches of the State Bank of India and some other banks are authorized to receive the contribution on behalf of ESIC.
Period of Contribution:
The following table illustrates the window period for Contribution and for obtaining cash benefit:
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Contribution
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Cash Benefit
|
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1st April to 30th Sept
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1st Jan of the following year to 30th June.
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|
1st Oct to 31st March of the year following.
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1st July to 31st December.
|
Under the Contract Labour (Regulation & Abolition) Act 1970.
- Definitions.—(1) In this Act, unless the context otherwise requires,—
2
[(a) “appropriate Government” means,—
(i) in relation to an establishment in respect of which the appropriate Government under the
Industrial Disputes Act, 1947 (14 of 1947), is the Central Government, the Central Government;
(ii) in relation to any other establishment, the Government of the State in which that other
establishment is situate;]
(b) a workman shall be deemed to be employed as “contract labour” in or in connection with the
work of an establishment when he is hired in or in connection with such work by or through a
contractor, with or without the knowledge of the principal employer;
(c) “contractor”, in relation to an establishment, means a person who undertakes to produce a
given result for the establishment, other than a mere supply of goods of articles of manufacture to
such establishment, through contract labour or who supplies contract labour for any work of the
establishment and includes a sub-contractor;
(d) “controlled industry” means any industry the control of which by the Union has been declared
by any Central Act to be expedient in the public interest;
(e) “establishment” means—
(i) any office or department of the Government or a local authority, or
(ii) any place where any industry, trade, business, manufacture or occupation is carried on;
(f) “prescribed” means prescribed by rules made under this Act;
(g) “principal employer” means—
(i) in relation to any office or department of the Government or a local authority, the head of
that office or department or such other officer as the Government or the local authority, as the
case may be, may specify in this behalf,
(ii) in a factory, the owner or occupier of the factory and where a person has been named as
the manager of the factory under the Factories Act, 1948 (63 of 1948), the person so named,
(iii) in a mine, the owner or agent of the mine and where a person has been named as the
manager of the mine, the person so named,
(iv) in any other establishment, any person responsible for the supervision and control of the
establishment.
Explanation.—For the purpose of sub-clause (iii) of this clause, the expressions “mine”, “owner” and
“agent” shall have the meanings respectively assigned to them in clause (j), clause (l) and clause (c) of
sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);
(h) “wages” shall have the meaning assigned to it in clause (vi) of section 2 of the Payment of
Wages Act, 1936 (4 of 1936);
(i) “workman” means any person employed in or in connection with the work of any
establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical
work for hire or reward, whether the terms of employment be express or implied, but does not include
any such person—
(A) who is employed mainly in a managerial or administrative capacity; or
(B) who, being employed in a superviory capacity draws wages exceeding five hundred
rupees per mensem or exercises, either by the nature of the duties attached to the office or by
reason of the powers vested in him, functions mainly of a managerial nature; or
(C) who is an out-worker, that is to say, a person to whom any articles or materials are given
out by or on behalf of the principal employer to be made up, cleaned, washed, altered,
ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the
trade or business of the principal employer and the process is to be carried out either in the home
of the out-worker or in some other premises, not being premises under the control and
management of the principal employer.
(2) Any reference in this Act to a law which is not in force in the State of Jammu and Kashmir shall,
in relation to that State, be construed as a reference to the corresponding law, if any, in force in that State.
FOR THE REGISTRATION OF PRINCIPAL EMPLOYER
How to Apply ?
Responsibility: Principal Employer.
Step-1:-
Activity: If the you are an already registered user, he/she will log in using the credentials. For a new user he/she fills up a Common Application Form(CAF) in the Portal of wblc.gov.in, which includes mainly applicant’s Personal Information including PAN/Voters ID/Aadhar, any other unique number tagged with that establishment, Contact Information, Establishment Information, Number of workers employed, Login Information etc. with Preferred User name & Password and create a User Credential.
Step-2 :-
Activity: Logs into the system with the valid credentials and captcha which lands up in the Dashboard.
Step-3:-
Activity: If Offline/Manual certificate available select ALREADY REGISTERED option from menu and apply for online application of Principal Employer under the Contract Labour (Regulation and Abolition) Act , 1970 by filling up necessary information in the Form and uploads self-certified copies of required documents
- NEW REGISTRATION: Select NEW REGISTRATION from menu and applies for online Registration of Principal Employer under the Contract Labour (Regulation and Abolition) Act , 1970 by filling up necessary information in the Form and uploads self-certified copies of required documents.
- Documents Involved: I. Valid Trade License, II. Articles of Association and Memorandum of Association/Partnership Deed, III. Factory License if any, IV. Other certificates of registration in case of other than company, proprietorship or partnership firm like cooperative, Trustees etc., V. Any other document in support of correctness of the particulars mentioned in the application if required
Step-4:-
Activity: Add valid contractor information into the system.
Step-5:-
Activity: Views the Filled in Information in the Application Preview Section before Final Submission or in case of correction rolls back to earlier sections and makes corrections and submit the application. The application is then reverted back to concerned officials according to jurisdiction for verification.
Step-6:-
Activity: Logs into the system with the credentials and views the status of application marked for correction if sent back by the Inspector, makes the corrections and resubmits the application.
Step-7:-
Activity: Views application status in the Dashboard marked as PAYMENT (PAY NOW) by ALC and makes payment Online through GRIPS. After successful payment of fees statutory FORM-I is automatically generated. Applicant can digitally/in-hand signs the FORM-I and upload it. After FORM-I is successfully uploaded, an acknowledgement is generated. In case it is returned back by the ALC he views on the Dashboard the status of application marked for correction and makes the necessary corrections and resubmits the application.
Documents Involved: FORM-I
Step-8:-
Activity: If the application is verified registration certificate is shown in the dashboard and FORM-V is generated. You can digitally/in-hand sign the FORM-V and send via e-mail or through SMS. The Serial number in FORM-V is needed to contractors for applying of License.
Note:- Track Status of Application through SMS Alerts generated through the System starting from Creating Login Credentials, Submission of Application, Correction Required, Payment of Fees , Status of Approval or Rejection , Status on Issue of Registration Certificate can be shown from the dashboard.
Checklist :-
- Trade License
- Article of Association and Memorandum of Association / Partnership Deed
- Factory License if any
- Previous Registration Certificate (If Already registered user for Registration)
- Any other document in support of correctness of the particulars mentioned in the application if required
- Other certificates of registration in case of other than company, proprietorship or partnership firm like cooperative, Trustees etc
- Form I
Timeline:-
SL.NO. Designation Officer Stipulated time limit.
1 Assistant Labour Commissioner 30 days
2 Deputy Labour Commissioner 45 days
3 Labour Commissioner 60 days
How to Apply Contractor Labour Licence ?
Step-1:-
Responsibility: Contractor.
Activity: The applicant shall open ‘www.wblc.gov.in’ and will select e-services and licensing of contractors thereafter. A guide line will appear agreeing which he/she will land up in the log in page. If the applicant is an already registered user, he/she will log in using the credentials. For a new user he/she fills up a Common Application Form(CAF) in the Portal of wblc.gov.in, which includes mainly applicant’s Name, Address, Contact Details, E Mail, PAN, Voters ID, Aadhaar number, Driving License , Trade License Number, any other unique number tagged with that establishment, establishment name and details including address, etc. with Preferred User name & Password and creates a User Credential.
Step-2 :-
Responsibility: Contractor
Activity: Logs into the System with the Valid Credentials and Captcha.
Step-3:-
Responsibility: Contractor
Activity: Lands up into the Dashboard.
Step-4:-
Responsibility: Principal Employer
Activity: If the contractor is yet to be provided the system generated unique Form-V number by the Principal Employer as mentioned in item 24 of the process for registration of establishment, the Principal Employer may Log into the system with the Credentials.
Step-5:-
Responsibility: Principal Employer
Activity: Views the Form-V, digitally signs or can sign manually in the hard copy and send via e mail or through SMS the Unique number of Form V to Contractors for applying of License.
Step-6:-
Responsibility: Contractor
Activity: Enters the system generated Unique Form V number issued by Principal Employer, through which maximum no of relevant fields for application for licensing would be populated in the Form.
Documents Involved:- I. Valid Form V, II. Valid Work Order, III. Any other documents in support of correctness of particulars furnished in application form, IV. Trade license
Step-7:-
Responsibility: Contractor
Activity: Fills up the additional Information as required.
Step-8:-
Responsibility: Contractor..
Activity: Views the Filled in Information before Final Submit. In case of corrections rolls back to earlier sections and makes corrections and Saves the application.
Step-9:-
Responsibility: Contractor
Activity: Final Submission of the application.
Step-10:-
Responsibility: Inspector concerned
Activity: Logs into the system with Credentials.
Step-11:-
Responsibility: Inspector concerned
Activity: Lands up in the Dashboard and selects the Application List from the Left hand Panel.
Documents Involved:- FORM-I
Step-12:-
Responsibility: Inspector concerned
Activity: He opens the application and verifies details one by one and marks Tick (√) which he finds correct and leaves the one as not verified which he finds Incorrect.
Step-13:-
Responsibility: Inspector concerned
Activity: Logs into the system with the Credentials and downloads the BOCW Registration FORM-II digitally signed by ALC.
Step-14:-
Responsibility: Inspector concerned
Activity: He may reverts back to applicant for Correction / Rectification with remarks in case any correction or rectification is required or may Call the applicant through System if required to answer specific queries or can forward it to the ALC for approval or rejection.
Step-15:-
Responsibility: Contractor
Activity: Logs into the system with the Credentials.
Step-16:-
Responsibility: Contractor
Activity: Views on the Dashboard the status of application marked for correction if sent back by the Inspector and makes the corrections and resubmits the application.
Documents Involved: I. Valid Work Order, II. Any other documents in support of correctness of particulars furnished in application form III. Valid Form V, IV. Trade license.
Step-17:-
Responsibility: Contractor
Activity: Logs into the system with Credentials.
Step-18:-
Responsibility: Inspector concerned
Activity: Verifies or re-verifies the application as the case may be and if found satisfactory forwards the same to the ALC.
Step-19:-
Responsibility: ALC of the Subdivision
Activity: Logs into the system with the Credentials.
Step-20:-
Responsibility: ALC of the Subdivision
Activity: Lands up in the Dashboard and views all the applications forwarded by Inspector and if found satisfactory allows for Payment by the applicant. In case ALC finds something that is not satisfactory in the application he may revert it back either to the applicant or the Inspector as he deems fit. ALC can also reject the application if finds so after observing principles of natural justice.
Step-21:-
Responsibility: Contractor
Activity: Logs into the system with the Credentials.
Step-22:-
Responsibility: Contractor
Activity: Views on the Dashboard the status of application marked for PAYMENT (PAY NOW) by ALC and makes payment Online through GRIPS and digitally signs the Form IV and uploads in the system. In case it is returned back by the ALC he views on the Dashboard the status of application marked for correction and makes the corrections and resubmits the application.
Step-23:-
Responsibility: Contractor
Activity: If the applicant cannot sign the application digitally through DSC or else he is required to submit the signed hard copy of the application form before the ALC. He is also required to upload a scanned copy of signed system generated application form.
Document Involved: I. Original signed application, II. Proof of submission of fees and security deposit.
Step-24:-
Responsibility: ALC of the Subdivision
Activity: Logs into the system with the Credentials.
Step-25:-
Responsibility: ALC of the Subdivision
Activity: After satisfactory payment ALC issues Digitally signed License Certificate (Form VI ) and Uploads in the system for Applicant to download it from the system.
Step-26:-
Responsibility: Contractor
Activity: Logs into the system with the Credentials & downloads the Digitally signed License Certificate.
Step-27:-
Responsibility: Contractor
Activity: Track Status of Application through SMS Alerts generated through the System starting from Creating Login Credentials, Submission of Application, Correction Required, Payment of Fees , Status of Approval or Rejection, Status on issue of License.
Step-28:-
Responsibility: Inspector Concerned
Activity: If the application is reverted back to the Inspector by the ALC, he will view the application along with remarks, if any, from the ALC, after logging into the system with credentials .He can either sent back the application to the applicant or forward the same to the ALC with remarks if any.
Step-29:-
Responsibility: Inspector Concerned
Activity: The contractor, in some cases, may also apply for license without the unique form V number. In that case the contractor will skip the above stated step and blank Form IV will be required to be filled up by the applicant after entering valid registration no of the Principal Employer. There after process as mentioned in 8 and onwards will follow.
Documents Involved:
- Valid Work Order,
- Any other documents in support of correctness of particulars furnished in application form,
III. Valid Form V,
- Trade license.
Checklist:-
- Work Order
- Form V
- Trade License / Address proof Certificate
- License Certificate or Last Renewal Certificate
- Other
- Form IV / Form VII
Timeline:-
SL.NO. Designation Officer Stipulated time limit.
1 Assistant Labour Commissioner 30 days
2 Deputy Labour Commissioner 45 days
3 Labour Commissioner 60 days
FEES STRUCTURE
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Registration Establishment/Amendment Certificate of Registration of Principal Employer under The Contract Labour (R & A) Act 1970.
|
|
Number of Workmen
|
Fees
|
|
Is 10 but does not exceed 20
|
₹200
|
|
Exceeds 20 but does not exceed 50
|
₹500
|
|
Exceeds 50 but does not exceed 100
|
₹1000
|
|
Exceeds 100 but does not exceed 200
|
₹2000
|
|
Exceeds 200 but does not exceed 400
|
₹4000
|
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Exceeds 400
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₹5000
|
|
Licensing of Contractors/Renewal of License /Amendment of License for Contractors under The Contract
Labour (R & A) Act 1970.
|
|
Number of Workmen
|
Fees
|
|
Is 10 but does not exceed 20
|
₹50
|
|
Exceeds 20 but does exceed 50
|
₹125
|
|
Exceeds 50 but does not exceed 100
|
₹250
|
|
Exceeds 100 but does not exceed 200
|
₹500
|
|
Exceeds 200 but does not exceed 400
|
₹1000
|
|
Exceeds 400
|
₹1250
|
|
Licensing of Contractors/Renewal of License /Amendment of License for Contractors under The Contract
Labour (R & A) Act 1970.
|
|
Category
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Security Deposit
|
|
Where the Contractor is a Co-operative Society
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@ Rs 25 for each of the workmen employed as
Contract Labour
|
|
For the Rest
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@ Rs 100 for each of the workmen employed as
Contract Labour
|
|
Registration of Establishment/Amendment of Registration of Establishments under Building and Other
Construction Workers (RE&CS) Act, 1996.
|
|
Number of Workmen
|
Fees
|
|
Is upto 100
|
₹500
|
|
Exceeds 100 but does not exceed 500
|
₹2000
|
|
Exceeds 500
|
₹10000
|
|
Registration of Motor Transport undertaking / Renewal of Registration of Motor Transport undertaking
under Motor Transport Workers Act, 1961
|
|
Maximum number of motor transport workers to be employed during the year
|
Fees
|
|
5
|
₹10
|
|
25
|
₹25
|
|
50
|
₹50
|
|
100
|
₹100
|
|
250
|
₹250
|
|
500
|
₹500
|
|
750
|
₹750
|
|
1000 and above
|
₹1000
|
|
|
|
|
Registration of establishment/amendment certificate of registration of Principal Employers under The
Inter State Migrant Workmen (RE & CS) Act, 1979
|
|
Number of Workmen
|
Fees
|
|
Is 5 or more but does not exceed 20
|
₹30
|
|
Exceeds 20 but does exceed 50
|
₹75
|
|
Exceeds 50 but does not exceed 100
|
₹150
|
|
Exceeds 100 but does not exceed 200
|
₹300
|
|
Exceeds 200 but does not exceed 400
|
₹600
|
|
Exceeds 400 but does not exceed 800
|
₹900
|
|
Exceeds 800 but does not exceed 1000
|
₹1000
|
|
Exceeds 1000
|
₹1500
|
|
Licensing of Contractors/Renewal of License /Amendment of License for Contractors under The Inter
State Migrant Workmen (RE & CS) Act, 1979
|
|
Number of Workmen
|
Fees
|
|
Is 5 or more but does not exceed 20
|
₹10
|
|
Exceeds 20 but does exceed 50
|
₹20
|
|
Exceeds 50 but does not exceed 100
|
₹40
|
|
Exceeds 100 but does not exceed 200
|
₹80
|
|
Exceeds 200 but does not exceed 400
|
₹160
|
|
Exceeds 400 but does not exceed 750
|
₹200
|
|
Exceeds 750 but does not exceed 1000
|
₹250
|
|
Exceeds 1000 but does not exceed 2000
|
₹350
|
|
Exceeds 2000
|
₹500
|
|
Licensing of Contractors/Renewal of License /Amendment of License for Contractors under The Inter
State Migrant Workmen (RE & CS) Act, 1979
|
|
Rule 9(2) : Where the licensing officer is satisfied in accordance with the procedure laid down in the proviso to sub-section (2) of Section 8 , that any person who has applied for or who has been issued a license , shall furnish security for due performance of the conditions of the license, he shall prepare an estimate of the amount needed to provide for recruitment or employment of migrant workmen on the basis of the factors specified in the sub –section (3) of the said section and after considering the
solvency of such person determine the amount of the security to be furnished by such person , which shall not exceed forty percent of the amount estimated by him.
|
|
Registration of Shop under the West Bengal Shops & Establishments Act 1963
|
|
Category of Shop
|
Fees
|
|
Shop having no employees
|
₹25
|
|
Shop having one to five employees
|
₹30
|
|
Shop having six to twenty employees
|
₹40
|
|
Shop having more than twenty employees
|
₹100
|
|
Registration of Establishments under the West Bengal Shops & Establishments Act 1963
|
|
Category of Establishment
|
Fees
|
|
Establishment of any class having no employees
|
₹25
|
|
Establishment of any class having one to five employees
|
₹30
|
|
Establishment of any class having six to twenty employees
|
₹50
|
|
Establishment of any class having more than twenty employees
|
₹250
|
|
Amendment of Registration Certificate of Shop under the West Bengal Shops & Establishments Act 1963
|
|
Category of Shop
|
Fees
|
|
Shop having no employees
|
₹10
|
|
Shop having one to five employees
|
₹20
|
|
Shop having six to twenty employees
|
₹25
|
|
Shop having more than twenty employees
|
₹50
|
|
Amendment of Registration Certificate of Establishment under the West Bengal Shops & Establishments
Act 1963
|
|
Category of Shop
|
Fees
|
|
Establishment of any class having no employees
|
₹10
|
|
Establishment of any class having one to five
employees
|
₹20
|
|
Establishment of any class having six to twenty
employees
|
₹25
|
|
Establishment of any class having more than twenty
employees
|
₹50
|
Provident Fund Act 1952.
Provident fund is a welfare scheme for the benefits of the employees. Under this scheme both the employee & employer contribute their part but whole of the amount is deposited by the employer. Employer deducted the employee share from the salary of the employee.
Applicability of the Act
It is applicable:
- a) Every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are employed;
- b) Every other establishment employing 20 or more persons or class of such establishments which the Central Govt. may notify;
- c) Any other establishment so notified by the Central Government even if employing less than 20 persons.
Every employee, including the one employed through a contractor (but excluding an apprentice engaged under the Apprentices Act or under the standing orders of the establishment and casual laborers), who is in receipt of wages up to Rs.6,500 p.m., shall be eligible for becoming a member of the funds. The condition of three months’ continuous service or 60 days of actual work, for membership of the scheme.
Types of Provident Fund
- Statutory Provident Fund (SPF)
- Public Provident Fund (PPF)
- Recognized Provident Fund (RPF)
- Unrecognized Provident Fund (URPF)
Statutory Provident Fund (SPF)
It is a provident fund registered under Provident fund Act, 1925. They are also known as government provident fund. So, the employees who are meant for govt, semi-govt employees, university or educational institutions affiliated to a university established under the statue or other specified institution would be qualified to give to them.
Public Provident Fund (PPF)
PPF is covered under Public Provident fund Act, 1968. Any member of the public weather employed or not can invest in PPF. Minimum Contribution in this fund is Rs. 500 & Maximum amount is 1, 50,000 per year. The contributions made to the scheme along with the interests are repayable after 15 years unless extended. The rate of interest, at present, under the scheme is 8% per annum.
Recognized Provident Fund (RPF)
This Scheme is registered under Employee’s Provident Funds and Miscellaneous Provisions Act, 1952.According to the act, any person who employees 20 or more employees is under an obligation to register himself under this Act. Any person can register himself by their choice weather they had less than 20 employees.
Unrecognized Provident Fund (URPF)
A scheme started by the employer and the employees in an establishment, whether approved by the commissioner of Income Tax is called an unrecognized provident fund.
PF Contribution Rate
Contribution of Pf paid by employer & employee is 12% (basic pay + dearness allowance + retaining allowance) Equal contribution is paid by the employer & employee. The establishment which employees less than 20 person shall be restricted to contribute 10% for both employee & employer contribution.
It is voluntary for the employees who drawn a salary less than 15000 per month to became the member of EPF.The employee who drawn a salary more than 15000per month at the time of joining is not required to make pf contribution. If they want to become the member of EPF, then they become with the consent of the Employer & Assistant PF Commissioner.
The entire 12% of your contribution goes into your EPF account along with 3.67% (out of 12%) from your employer, while the balance 8.33% from your employer’s side is diverted to your EPS (Employee’s Pension Scheme) and the balance goes into your EPF account.
Breakup of EPF Contribution
- 12% of the employee’s salary goes towards the EPF.
- Whereas the employer’s contribution is divided as below:
- 67% goes towards contribution for EPF
- 33% goes towards contribution for EPS
- 5% goes towards contribution for EDLI
- 1% goes towards contribution for EPF administration charges
- 01% goes towards contribution for EDLI administration charges
Therefore, the employer contribution is 13.61%. The premium and management charges are borne by the employer and the maximum limit is set at 0.5% of Rs.15, 000.
Provident Fund (PF) Revised Admin Changes Calculation :
Employer’s share of Contribution towards PF is segregated as : 3.67% into Employees’ Provident Fund (EPF) 8.33% into Employees’ Pension Scheme (EPS) 0.5% into Employees’ Deposit Linked Insurance Scheme (EDLIS) 0.5% for EPF Administrative Charges (wef 01/06/2018) EDLIS Administrative Charges- Not Applicable (wef 01/04/2017)
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Account No.
|
Particulars
|
Employee
|
Employer
|
|
1
|
EPF Contribution
|
12.00%
|
3.67%
|
|
10
|
EPS Contribution
|
–
|
8.33%
|
|
21
|
EDLIS Contribution
|
–
|
0.50%
|
|
2
|
EPF Administrative Charges
|
–
|
0.50%
|
|
22
|
EDLIS Administrative Charges
|
–
|
–
|
| |
Total
|
12.00%
|
13.00%
|
Update 01-06-2018 : EPF Admin charges reduced to 0.50 % Subject to a minimum of Rs.75 per month for every non-functional establishment having no contributory member and Rs 500 per – month – per – establishment for others. EDLI Admin charges remains 0.
PF Admin Charges Reduced to 0.5% w.e.f. 1 June 2018: MoL&E/ EPFO Notification dt. 21 May 2018
10% rate of contribution (instead of 12%) is applicable for: Any establishment in which less than 20 employees are employed. Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction (BIFR). Any establishment which has at the end of any financial year, Accumulated Losses equal to or exceeding its entire Net Worth and, Any establishment in following industries:- (a) Jute (b) Beedi (c) Brick ( d) Coir and (e) Guar gum Factories.
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Particulars
|
Employee
|
Employer
|
|
EPF Contribution
|
10.00%
|
1.67%
|
|
EPS Contribution
|
–
|
8.33%
|
|
EDLIS Contribution
|
–
|
0.50%
|
|
EPF Administrative Charges
|
–
|
0.50%
|
Points to be noted for contribution calculation. The Employee contribution towards EPF, EPS & EDLI should be rounded up to the next value. EPF Administration charges, also to be rounded up to the next value. Employer to remit @ 0.5% of contributions (subject a minimum of Rs.500) towards EPF Administration charges per month. In the case of Non-functioning organisations (if the prevailing month has no contributory members) the minimum Administrative charges to be paid is Rs.75.
Calculation of EPF,EPS,EDLI,Admin charges under various scenarios Lets look at calculation of EPF, EPS &EDLI under various combinations where the Employer &Employee may / may not choose to contribute equally into the fund or where the salary drawn is over / under the minimum prescribed limits.
Universal Account Number (UAN)
It is a 12 digit number allotted to the employee who is contributed to EPF. It remain same throughout the life of the employee. It does not change with the change of Job. It will help in easy transfer and withdrawals of claims. Along with the service of Online Passbook, SMS Service on each deposit of contribution & online KYC update can be provided on the basis of UAN. But before that UAN need to be activated on EPFO portal.
The member who is unable to withdraw PF for any reason can withdraw without consent of employer. They can submit FORM 19 for EPF (Employees Provident Fund) and FORM 10C for EPS (Employees’ Pension Scheme) with any of the following official’s attestation to EPFO office in which their EPF account is maintained.
- Any gazette officer
- The Magistrate
- The Post/ Sub Post master
- President of the Village Union
- President of the Village Panchayat where there is no Union Board
- Chairman/ Secretary/ Member of the Municipal/ District Local Board
- Member of the Parliament or Legislative Assembly
- Manager of the Bank in which your savings Bank Account is currently maintained
- Head of Educational Institution which is recognized by Government
- Any authorized official, as may be approved by the commissioner
Statutory Provident Fund (SPF)
It is a provident fund registered under Provident fund Act, 1925. They are also known as government provident fund. So, the employees who are meant for govt, semi-govt employees, university or educational institutions affiliated to a university established under the statue or other specified institution would be qualified to give to them.
Public Provident Fund (PPF)
PPF is covered under Public Provident fund Act, 1968. Any member of the public weather employed or not can invest in PPF. Minimum Contribution in this fund is Rs. 500 & Maximum amount is 1, 50,000 per year. The contributions made to the scheme along with the interests are repayable after 15 years unless extended. The rate of interest, at present, under the scheme is 8% per annum.
Recognized Provident Fund (RPF)
This Scheme is registered under Employee’s Provident Funds and Miscellaneous Provisions Act, 1952.According to the act, any person who employees 20 or more employees is under an obligation to register himself under this Act. Any person can register himself by their choice weather they had less than 20 employees.
Unrecognized Provident Fund (URPF)
A scheme started by the employer and the employees in an establishment, whether approved by the commissioner of Income Tax is called an unrecognized provident fund.
PF Contribution Rate
Contribution of Pf paid by employer & employee is 12% (basic pay + dearness allowance + retaining allowance) Equal contribution is paid by the employer & employee. The establishment which employees less than 20 person shall be restricted to contribute 10% for both employee & employer contribution.
It is voluntary for the employees who drawn a salary less than 15000 per month to became the member of EPF.The employee who drawn a salary more than 15000 per month at the time of joining is not required to make pf contribution. If they want to become the member of EPF, then they become with the consent of the Employer & Assistant PF Commissioner.
The entire 12% of your contribution goes into your EPF account along with 3.67% (out of 12%) from your employer, while the balance 8.33% from your employer’s side is diverted to your EPS (Employee’s Pension Scheme) and the balance goes into your EPF account.
Breakup of EPF Contribution
- 12% of the employee’s salary goes towards the EPF.
- Whereas the employer’s contribution is divided as below:
- 67% goes towards contribution for EPF
- 33% goes towards contribution for EPS
- 5% goes towards contribution for EDLI
- 1% goes towards contribution for EPF administration charges(*on the above new rate)
- 01% goes towards contribution for EDLI administration charges(*on the above new rate)
Therefore, the employer contribution is 13.61%. The premium and management charges are borne by the employer and the maximum limit is set at 0.5% of Rs.15, 000.
Universal Account Number (UAN)
It is a 12 digit number allotted to the employee who is contributed to EPF. It remain same throughout the life of the employee. It does not change with the change of Job. It will help in easy transfer and withdrawals of claims. Along with the service of Online Passbook, SMS Service on each deposit of contribution & online KYC update can be provided on the basis of UAN. But before that UAN need to be activated on EPFO portal.
The member who is unable to withdraw PF for any reason can withdraw without consent of employer. They can submit FORM 19 for EPF (Employees Provident Fund) and FORM 10C for EPS (Employees’ Pension Scheme) with any of the following official’s attestation to EPFO office in which their EPF account is maintained.
- Any gazette officer
- The Magistrate
- The Post/ Sub Post master
- President of the Village Union
- President of the Village Panchayat where there is no Union Board
- Chairman/ Secretary/ Member of the Municipal/ District Local Board
- Member of the Parliament or Legislative Assembly
- Manager of the Bank in which your savings Bank Account is currently maintained
- Head of Educational Institution which is recognized by Government
- Any authorized official, as may be approved by the commissioner
Taxability of PF
Deduction of PF can be claimed under section 80C while calculating Income Tax & when the employee withdraw the amount of PF & Interest after the retirement then, PF amount & Interest amount is not taxable.
Pf can be accumulated withdrawn by the employee if he is unemployed for more than 2 month. 75% PF can be withdrawn after the employment of 1 month & rest 25% PF can be withdrawn after the unemployment of 2 month. It is on the choice of the employee after withdrawn of 75% amount that they should continue with the PF account or want to withdrawal the whole amount.
Income Tax Liability on PF withdrawal
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Serial No
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Scenario
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Taxability
|
|
1
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Amount withdrawn is < Rs 50,000 before completion of 5 continuous years of service
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No TDS.
But while filling return amount of pf shall be shown.
|
|
2
|
Amount withdrawn is > Rs 50,000 before completion of 5 years of continuous service
|
TDS @ 10% if PAN is furnished;
No TDS in case Form 15G/15H is furnished No TDS.
|
|
3
|
Withdrawal of EPF after 5 years of continuous service
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No need to mention in return as the amount is not taxable No TDS.
|
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4
|
Transfer of PF from one account to another upon a change of job
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No need to mention in return as the amount is not taxable.
|
|
5
|
Before completion of 5 continuous years of service if
employment is terminated due to employee’s ill health
The business of the employer is discontinued
or the reasons for withdrawal are beyond the employee’s control
|
No TDS.
Further, the individual need not offer the same in the return of income as such withdrawal is exempt from tax
|
List of required documents for PF Registration
Following is the complete list of documents required for PF registration:
- Digital Signature of Proprietor/Partner/Director
- Aadhar Card of Proprietor/Partner/Director
- PAN Card of Proprietor/Partner/Director
- Cancelled Cheque/Bank Statement of Entity
- PAN Card of entity
- Electricity Bill of the Registered Office (not older than 2 months)
- Shop and establishment Certificate/GST Certificate/ License issued by the government for factory.
- Attendance register and Salary Register.
- Employee Aadhar Card,PAN Card,Bank Details and Family Nomination Details,Employee Mobile Number and Email ID.
- Employer Trade Licence,
- Professional Tax Enrolment and Registration Certificate.
Documents Required for EPF Withdrawal
The following documents are required while applying for PF withdrawal-
- Composite Claim Form
- Two revenue stamps
- Bank account statement (The bank account should be only in the name of the PF holder while he/she is alive)
- Identity proof
- Address proof
- One blank and cancelled cheque with clearly visible IFSC code and account number
- Personal information such as father’s name, date of birth, etc. should clearly match with the identity proof
If an employee withdraws his PF amount before 5 years of continuous service, he is liable to facilitate ITR Forms 2 and 3 in order to prove a detailed breakup of the entire amount deposited in PF account every year.
Eligibility Conditions for EPF Withdrawal
Following are the conditions that an employee must meet in order to be eligible for withdrawing EPF-
- The total amount from the EPF account can be withdrawn only after retirement. EPFO considers early retirement only after the person has crossed 55 years of age
- Partial withdrawal of EPF is permitted only in the case of a medical emergency, house purchase or construction, or higher education
- EPFO allows withdrawal of 90% of the amount 1 year before retirement
- One can withdraw the EPF corpus if he/she faces unemployment before retirement due to lock-down or retrenchment
- As per the new rule, only 75% of the corpus can be withdrawn after 1 month of unemployment. The remaining will be transferred to the new EPF account after gaining employment
- Employees do not need to wait for approval from their employer for withdrawing their EPF. By linking UAN and Aadhar to your EPF account, they can get approval online
- While making the claim online, you must have-
- An active UAN number
- Bank details linked with UAN
- PAN and Aadhar details seeded into EPF database
EPF Withdrawal Online Procedure:
- In order to withdraw EPF online, you must make sure that your UAN is activated and it is linked with your KYC (Aadhaar, PAN and bank details). If you meet this condition, you can follow the procedure given below to withdraw your EPF online.
- Step 1-Sign in to the UAN Member Portal with your UAN and Password.
- Step 2- From the top menu bar, click on the ‘Online Services’ tab and select ‘Claim (Form-31, 19 & 10C )from the drop-down menu.
- Step 3- Member Details will be displayed on the screen. Enter the last 4 digits of your bank account and click on ‘Verify‘
- Step 4-Click on ‘Yes’ to sign the certificate of undertaking and proceed further
- Step 5- Now click on the‘Proceed for Online Claim’ option
- Step 6- Select ‘PF Advance (Form 31)’ to withdraw your funds online
- Step 7– A fresh section of the form will open, wherein you have to select the ‘Purpose for which advance is required’, the amount required and the employee’s address
- It is worth noting that all options for which the employee is not eligible for withdrawal will be mentioned in red.
- Step 8 –Tick on the certification and submit your application
- Step 9 –You may have to submit scanned documents depending on the purpose for which you have filled the form
- Step 10 –Your employer has to approve your withdrawal request after which the money will be withdrawn from your EPF account and deposited in the bank account mentioned at the time of filling the withdrawal form.
- An SMS notification will be sent to your mobile number registered with EPFO. Once the claim is processed, the amount will be transferred to your bank account. Although no formal time limit has been provided by the EPFO, the money usually is credited in 15-20 days.
What is Form 31 19 & 10C in PF?
- The composite Claim Form is a combination of Form 19, Form 31, Form 10C and Form 10D. Form 19 is filled for claiming final PF settlement, Form 10C is filled for pension withdrawal and Form 31 is filled for partial EPF withdrawal and Form 10D for withdrawing your monthly pension.
Provident Fund Payment and Return Due Date:
- EPF payment due date is the date by which PF from the employees’ salary should be deducted. This should be done on or before the 15th of every next month. However, the due date of PF return and the due date of PF payment are both the same, i.e. on or before the 15th of every month.
Penalty for Delayed Payment:
Delayed remittance of PF deposit will incur penal damages. The penal charges, as specified by the EPFO, are as follows:
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S.No
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Time-Period of Delay
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Rate of Penalty
|
|
1
|
Delay for up to 2 months
|
5% per annum
|
|
2
|
Delay ranging from 2 months to 4 months
|
10% per annum
|
|
3
|
Delay ranging from 4 months to 6 months
|
15% per annum
|
|
4
|
Delay exceeding 6 months
|
25% per annum
(It may correspondingly go up to 100%)
|
Damages cannot be levied at a lesser rate than what is specified. However, exceptions in terms of reductions or waiver of damages can be extended to sick industrial companies having rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR).
The date of debit from the employers account may be considered as the date of payment of penal damages. Occurrence of delay due to delayed credit in EPFO’s accounts or delayed transacting by the banks will be dealt with in accordance with the banking agreement with the various banks.
